EMPLOYEE SHARE SCHEMES
SIP vs SAYE: what changes in your payslip?
| SIP partnership shares | SAYE | |
|---|---|---|
| Contribution source | Before Income Tax and NI | Net pay |
| Main limit | Lower of £1,800/year or 10% of income | £500/month across contracts |
| Employer enhancement | Up to 2 matching shares per partnership share | Option price may be discounted |
| Immediate share exposure | Yes | No; savings remain cash until exercise |
Why the cash cost differs
A £100 SAYE deduction generally reduces take-home pay by £100. A £100 SIP partnership contribution can cost less in bank pay because it reduces relevant Income Tax and NI earnings. SAYE offers the choice at maturity to use savings to buy shares at the option price or take the cash instead.
Which is better?
The answer depends on matching, the SAYE option discount, how long you can leave the money invested and how much exposure you already have to your employer. The calculator compares the immediate cash effect; it does not predict future share returns.