The growing Berkshire College of Agriculture (BCA) says it has been forced to cut staff salaries by four per cent to fund its continued development and avoid redundancies.
The college, based in Hall Place in Burchetts Green, has asked its 320 staff earning more than £15,000 per annum to take the cut from January 1.
Members of its senior management team have also accepted a six per cent reduction in their salary.
The college insists the move is not because it is in financial trouble, but is needed to sustain it as a business model as it continues to grow.
It has spent more than £15m on expansion over the last 10 years, taking on hundreds of extra pupils.
Principal Gillian May said the pay reductions 'effectively equates to 20 jobs', meaning redundancies will be avoided.
"In many ways it's a positive story in the way that staff have rallied round and shown their support," she added.
"I want to run at a level of staffing cost that allows us to grow."
The college runs under a 'lagged' model of funding, meaning it only receives Government cash for the services it delivers the year after it has been delivered.
Last year's lag was £1m, while this year education and training costs stand at £0.7m so far.
Mrs May said staffing is the college's largest expenditure and added: "It's something you have to think very carefully about.
"When you are growing you are educating your people and not being paid for it until after it's delivered.
"We had to staff that education and because we continue to grow, which is great for the staff, pupils and community, we continue to have that lag."
Staff have been offered four extra days of paid holiday in exchange for the cut, and the situation will be reviewed next summer.
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