We have tried to avoid jargon on this website, but some terms may not be widely understood. If you do not understand a term, please click on the links below for an explanation.
Actively at work means that an employee has not received medical advice to refrain from work, is not absent from work or restricted from working due to illness or injury and is actively following their normal occupation. This means working at their normal capacity for the normal number of hours required by their contract, either at their normal place of business or at a location at which the business requires them to work.
Where the requirement to be actively at work refers to a particular day, which is not a working day, employees will be considered to be actively at work unless their medical records shows that they were suffering from a medical condition which would reasonably have been expected to prevent them from working normally.
This is the three-week period during November and December each year when you can choose your annual Benefit eXchange benefits for the forthcoming year.
For the 2020 Benefit eXchange year, this is your annual reference salary as at 1st November 2019, or your date of joining Northern Trust if later.
If you are on an approved leave of absence as at 1st November 2019 (e.g. maternity leave or sick leave), your Benefit eXchange enrolment salary will be your reference salary on the last day before you started leave (subject to any increases that may be effective as at 1st November 2019).
This reference salary is used to calculate your company benefit and the cost of your benefits during the year, with the exception of pension benefits which are based on pensionable salary as defined by the relevant scheme rules.
Your Benefit eXchange enrolment salary is relevant only for the purposes of Benefit eXchange, and does not affect any other benefit you may be eligible to receive from Northern Trust outside Benefit eXchange.
Benefit eXchange years will run from 1st January to 31st December each year, subject to any changes that Northern Trust may introduce to Benefit eXchange and the Benefit eXchange year in the future.
This is a benefit where the value is treated as earned income by HM Revenue & Customs (HMRC). HMRC treats benefits-in-kind differently from salary, for the purposes of Income tax and National Insurance contributions. This may be advantageous to you depending on the type of benefit you have chosen. Therefore, if your benefit choices are treated as benefits-in-kind, you may pay the following (depending on which benefits are provided):
Where your choice of Benefit eXchange benefits includes benefits-in-kind, the value of the taxable benefit will be taxed via PAYE through payroll in the month that you receive the benefit.
A company or organisation that provides one or more of the benefits offered through Benefit eXchange. All benefits are subject to the benefit provider's terms and conditions.
Your natural children, your legally adopted children, your step children, children for whom you are the legal guardian, foster children or children of your partner. Children must be unmarried. Please refer to the individual benefit pages for the maximum age of children for each benefit.
You should always refer to the relevant benefit terms and conditions for information about any specific restrictions that may apply.
Your company benefit is what the company is funding for you (excluding any benefits in exchange for salary sacrifice) and it includes any benefit (e.g. holiday and private medical insurance).
The company benefit section at the top of the enrolment page shows you what your individual company benefits are and what the cost to the company is for each element.
The cost of each of the benefit options under Benefit eXchange shows the cost to you as an employee.
This is your gross salary excluding any statutory pay.
Your contractual salary is your gross salary due under your contract of employment. You should read this definition in conjunction with the definition of salary sacrifice.
These are the benefits that will automatically be allocated to you for the Benefit eXchange year if you do not make any benefit choices during annual enrolment (or your initial enrolment if you join mid-year). Your default benefits are those that are shown on the enrolment page in the 'your choices' section when you first enter the Benefit eXchange website. They are normally the benefits you selected in the previous Benefit eXchange year subject to any changes in Benefit eXchange benefits, their costs and/or their terms and conditions with the following exceptions:
For more information, please see the 'How Benefit eXchange works' section of this website.
The level that reference salary is capped at for the purposes of calculating Life assurance for employees joining the Pension Plan on or after 01/06/1989.
The figure for the 2019/20 tax year is £166,200 and this is reviewed each tax year.
The minimum level at which employee National Insurance contributions are payable. This is £8,632 per annum for the 2019/20 tax year and this is reviewed each tax year.
The enrolment form is the website page under 'your choices' where you can choose your Benefit eXchange benefits.
Your family includes your partner and your children.
This is Northern Trust's HR service centre for EMEA, and can be contacted by emailing EMEA HR Service Centre at MyHRHelp, raising a MyHRHelp case via My Place or calling partner assist helpline internally (x982 4357), option 4.
If calling from outside the Northern Trust phone network the direct dial is +44 (0) 207 982 4357 (option 4).
Income tax is paid on your total personal income in a tax year, once any personal allowances available have been taken into account (i.e. your 'taxable income'). Income tax on your earnings is collected through the PAYE system operated by employers. HMRC will allocate you a tax code based on your personal allowances and other income (such as benefits-in-kind) and your employer deducts the tax due according to that code and pays it over to HMRC.
Where you have other sources of income outside of your employment you may need to complete a self-assessment tax return and pay any additional tax on this income.
Certain defined events allow you to change some of your benefit choices during the Benefit eXchange year, if you wish. These include:
Not all life events allow you to change your benefits and some of the insured benefits will only allow a limited number of life events each year. Only certain life events are deemed qualifying life events. The remainder are included as they practically impact on your ability to make changes. Go to Making changes at a life event in the 'How Benefit eXchange works' section for more details and to review a summary table setting out the main life events and qualifying life events.
Remember that if you want to change your pension contributions, charitable donations, childcare voucher selections, you can request a Anytime life event for these benefits at any point during the Benefit eXchange year.
You can also change your Share Purchase selection via the Anytime life event however changes are only permitted outside of the Northern Trust Quarterly Earnings Blackout Period. Please refer to Partner Passport for further details.
This is the minimum level of benefit that you must take within Benefit eXchange and forms part of your company benefit at Northern Trust. Minimum benefits are as follows:
These are paid on earnings between the earnings threshold and the upper earnings limit at the rate of 12% of earnings. Contributions are paid at a rate of 2% on earnings above the upper earnings limit.
Many of the benefits that you can choose within Benefit eXchange are exempt from National Insurance.
The national living wage is set by the Government each year and is the minimum hourly rate that you can be paid if you are aged 25 or over. This was launched for the first time in April 2016 and the rate from April 2019 will be:
Although you can give up some of your salary to increase your benefits over and above the value of the company benefits, you cannot reduce your salary below the national living wage level. If your proposed benefits would have the effect of reducing your salary to below the national living wage, you will be asked to adjust your choices accordingly.
The national minimum wage is set by the Government each year and is the minimum hourly rate that you can be paid. For the year starting 1st April 2019, the rate is:
Although you can give up some of your salary to increase your benefits over and above the value of the company benefits, you cannot reduce your salary below the national minimum wage level. If your proposed benefits would have the effect of reducing your salary to below the national minimum wage, you will be asked to adjust your choices accordingly.
Net pay deduction means deductions from your net pay.
Your net pay is your contractual salary after the deduction of Income tax, National Insurance contributions and any other deductions from your pay.
This is the cost of the options that are shown to you on the enrolment form. These reflect the cost of the benefit option to you, having taken into account any company benefit (i.e. where Northern Trust is funding a portion of the benefit). A positive amount is a cost (and will result in salary sacrifice being applied) and a negative amount is a credit (and will result in payment to you).
This is your Legal Spouse, Civil Partner or the person who is co-habiting with you.
You can only nominate one person as your partner. Your partner can be the same gender as you or the opposite gender from you.
You should always refer to the relevant benefit terms and conditions for information about any specific restrictions that may apply.
Your pensionable salary is the salary on which your pension contribution is calculated. Your reference salary is used for this purpose.
This is the age you, your partner and/or your children are at the start of the relevant Benefit eXchange year and will be used to calculate the cost of certain benefits for the Benefit eXchange year. For new joiners, the plan age will be their age at the start of the current Benefit eXchange year.
This is a life event that HMRC would consider justifying a change in salary sacrifice arrangements, without affecting the tax effectiveness of Benefit eXchange. Generally a qualifying life event will be an unforeseen event.
This is your gross annual salary (i.e. contractual salary) before you make your choices under Benefit eXchange. It is this salary that will be used for all salary related calculations (e.g. salary increases, incentive awards, pension contributions and other benefit calculations). This is to ensure that your benefits do not reduce as a result of you making choices through Benefit eXchange.
Reference salary for the purposes of the life assurance benefit is subject to the earnings cap.
These are linked to a percentage/multiple of your reference salary (e.g. life assurance, income protection and pension benefits depending on the rules of the relevant benefit).
Salary sacrifice is an arrangement where you exchange part of your contractual salary for a non-cash benefit. Salary sacrifice is a variation to your contractual terms and conditions of employment.
By receiving benefits under a salary sacrifice arrangement, there will be a reduction in your contractual salary and, if this is replaced by Income tax and/or National Insurance contribution exempt benefits, a reduction in the amount of National Insurance contributions or Income tax that you pay. The amount of the reduction in contractual salary will be shown on the enrolment page.
However, you should be aware that by agreeing to reduce your contractual salary, this could affect the level of certain State benefits you may be eligible to receive (e.g. statutory maternity pay or state pension). For more information please see the 'How Benefit eXchange works' section of this website.
Your contractual salary before you make any choices under Benefit eXchange will be recorded and maintained as your reference salary. This will be the salary that is used to calculate other salary-related benefits and compensation.
Family that consists of one parent or guardian and children.
The state pension age applicable to you which is in force from time to time.
The maximum amount of salary on which the standard rate of employee National Insurance contributions are payable. This is £50,000 a year for the 2019/20 tax year. Salary above this amount will be subject to 2% employee National Insurance contributions. These figures are reviewed each tax year.