SALARY SACRFICE PRODUCTS ARE A POPULAR EMPLOYEE BENEFIT
But what are they and how do they work?
Salary sacrifice products like Cycle To Work and car schemes are popular employee benefits that can support your employee’s financial wellbeing as they can make products more affordable to your teams.
Supporting your staff with their financial wellbeing can help with their mental wellbeing and your business too. According to People Management, money continues to cause the most worries for the majority of people, with 26% of UK employees worrying about money on an ongoing basis. Plus, not only do money worries affect any employees wellbeing outside of work, it can also affect presenteeism, absenteeism and retention costing UK businesses anywhere between 13 and 17% of payroll costs.
Here’s all you need to know about salary sacrifice and how introducing these types of benefit in your business, can help your employees…
What’s salary sacrifice and how does it work?
Salary sacrifice products allow your employees to spread the cost of an item over a fixed term by making a payment every month with the funds coming directly from their pay slips. This helps your employees get access to the products they want, without having to pay a large fee up front.
There are many different schemes available that your teams can benefit from including...
Tech deduct: whether it’s the newest tablet, a smartwatch to help them stay fit, a new phone or an upgrade on their laptop, our scheme makes typically expensive tech purchases, more affordable for your employees.
Annual leave purchase: there are some years where we don’t have enough holiday days to do the things we want, whether your employees need more time for a special occasion or a once-in-a-lifetime holiday! Letting them purchase extra days while spreading the cost over a fixed number of months can really help to build a strong work-life balance.
New cars: let your employee have use of a new car without the big financial investment and with over 18,000 to choose from there’s really something for everyone. Plus, we take care of everything including service and maintenance, insurance, road tax and roadside assistance. And, you and your employees can make savings on the latest ultra-low emission cars.
Travel season tickets: for your employees who can’t work from home, or prefer to work from an office, then the cost of commuting can really add up! Help them spread the cost of their season ticket to make the burden a little easier.
Salary sacrifice bike scheme: Known as Cycle To Work you can help your employees get access to the bike they want, whether it’s a mountain bike, electric or BMX, while making it more affordable too! As a bonus, it can help improve your employees’ physical wellbeing and make your company a little bit greener as your teams can swap cars for cycling to work.
The benefits of salary sacrifice:
Some salary sacrifice schemes, like Cycle To Work and Ultra-low emission cars, can help you and your employees save money on tax and NI savings as the salary deductions are made before tax.
With our Cycle To Work scheme employees can save up to 32% in tax and NI contributions for the basic rate taxpayer and up to 42% in tax and NI contributions for a higher rate taxpayer. Plus, as an employer you can save up to 13.8% on NI payments.
It also makes services more accessible and affordable! Not all of your employees can afford new tech or an electric car outright but spreading the cost can help.
How we can help you support your teams’ financial wellbeing:
We make it easy for you to provide the benefits that your employees want by supporting with the administration, communication and reporting. Plus, all our salary deduce schemes include a Salary Deduct Calculator meaning your employees can see exactly how much a purchase will cost them. Get in touch today to start helping your employee’s salary stretch further!