An Employee Benefits FAQ
If you are confused by the ins and outs of employee benefits then you are not alone. Both employers and employees can find the subject a bit confusing and be unsure where they fit in. Employee benefits are a great tool for recruiting and keeping the best staff and for employees to be able to claim assistance in a number of areas. Take a look at some of these frequently asked questions that will help clear up and grey areas.
What Are Employee Benefits?Employee benefits are anything that is offered to the employee on top of the salary that they are receiving. This might be health insurance, pensions, childcare vouchers, company cars etc.
What Are the Advantages?An attractive employee benefits package can help to secure good employees and keep them happy in their jobs. In can be cost effective for the employer and can make life easier for the employee by providing benefits such as pensions and gym membership that they would otherwise have to organise themselves. Employee benefits can also be a good tax deal for both parties.
How Are They Taxed?Tax and employee benefits is a complex subject. Generally, benefits are viewed as part of an employee’s overall payment package but not all benefits are taxable. It is best to consult with your HMRC for further guidance.
What is Salary Sacrifice?A salary sacrifice is a benefit that actually results in a reduction of salary for the employee. This benefits the employer as they are paying less but also the employee as schemes are usually heavily discounted and things they would have to pay for anyway. For example, a free loan for a yearly oyster card, or payments towards a car lease.
What Are Incentive Schemes?Incentive schemes are most often used in Sale based jobs. They work by offering a benefit or reward if an employee meets or exceeds a set target. They are a good way to motivate staff but need to be planned and managed carefully.
What Are Non-financial Benefits?Regular employee benefits usually have a financial incentive. However, modern workers are much more focused on work/life balance and may be more interested in benefits that make their life happier. An employer may be willing to offer flexible working or unpaid leave to help working mother or allow and employee to take a career break.
Employee benefits are a good thing for both the employer and employee. They help to recruit and motivate staff members and can have financial benefits for companies. For employees, they make their job seem more appealing and help organise areas of their life that they would otherwise need to do themselves. They can help people manage their cashflow and make their salary better. There are so many different types of employee benefits that can be used in varying ways that it is important that both sides understand them. Take your time to do some research, ask questions and work out what is available to you.