ADMINISTRATION OPTIONS

Through Government Allowances certain benefits are allowed to be administered through a business.
These registered benefits can be administered in different ways, most enable TAX savings such as VAT. However the more committed an organisation is the more savings there can be made for both employers and employee's.

Employee Incentives, Benefits and Rewards allow for savings on certain services an employee purchases, or may want to purchase. These savings occur based on the administration choice an organisation chooses:

Salary Sacrifice Agreements
An agreement between an employer and employee for a temporary reduction in salary/wages to pay for a benefit, usually for a 12 month period.
Salary Sacrifice cannot be used if the employee's monthly payments take their remaining gross salary to below the minimum wage and over 18 year olds; completed the employer's probationary period (if applicable).

Savings Explanation
On the value agreed - National Insurance paid by both parties, Income TAX on that value, VAT for employee on the goods or service, however some of these goods or services might require apply for P11D; meaning some TAX being applied but in most cases this showing TAX savings.

Flexible Benefits
Similar to Salary Sacrifice except the agreement is where goods and services to a value are part of the employment package and the organisation is paying directly.

The agreement and options usually run for 12 months, some organisations allow a 6month joining window for any new employees wishing to join the scheme (these windows would mean an 18month agreement to balance out).
These goods and services will be identified on a P11D.

Corporate Discounts
An agreement with the employee's to create a discount on usual purchase; no TAX savings made.

Definitions:

  • Salary/Wages – employee's and employers both have to pay National Insurance on the salary earned.
  • Income TAX – the employee is taxed on earnings made.
  • VAT – tax paid for purchasing most goods and services.
  • P11D – show the value of 'benefits in kind' that effectively increased income.
  • P60 – years summary of pay and tax deducted.

Benefit Schemes and Packages through a Salary Sacrifice enables National Insurance savings for Employers and both TAX and National Insurance savings to Employees. They are now a very popular solution to increasing moral, employee loyalty, adding value and savings to businesses.

Contact us and register your interest to find out what tailored Employee Incentive Packages we can set up for you.