Employees get a list of benefits that are special to them, which means only they can enjoy those benefits. These benefits include the insurance benefit for healthcare. You can even afford non-cash benefits or non-monetary benefits as well by salary sacrifice. There is a list of such benefits. But among them the special major schemes include:
- Season ticket loan
- Enhancing pension contribution
- The scheme of “cycle to work”
- Salary sacrifice scheme
- Administrative meeting arrangements of salary sacrifice
- Share-save scheme
The major non-monetary benefit schemes
- Season ticket loans: Allowances are given for tickets to the employees. These tickets are for the train journey that they avail. The journey distance is required to be short or medium. There are provisions of buying this “season tickets” on a weekly, monthly, or yearly basis. Discounts are allowed when someone pays the money in advance or pays the full amount at the same time. There are huge discounts that can be availed if someone picks the journey for a minimum of three times a week.
Hence it helps in huge cost saving. This is the reason why “season ticket loans” is so important. The employees take the season tickets loan from the employers. There is no need for them to pay any interest rate against the loan. It is because maximum employers not charge any interest while some may charge a very nominal amount. There are two modes of payment. It can be paid directly to the company, or the employer can also take it and then give it to the company. £10,000 is the maximum amount of loan that can be granted.
The repayment technique includes cutting a fixed amount from the salary of the employees. Usually, within 10 to 12 instalments, the loan amount gets paid. The entire process must be done in a legal manner and with formal documentation. This means that an agreement should be made during this give and take of loans.
- Enhancement of pension contribution: Enhancement of pension contribution is also a part of the arrangement of salary sacrifice. If the employees want, they can increase the amount of pension contribution. This will result in salary sacrifice. Through this process, about 2% net income of the employees can be saved from national income contribution. The employees will save the amount that is sacrificed on that 13.8%.
- “Cycle to Work” scheme: This is a type of scheme which was started in the United Kingdom. The motive of the scheme was to build a healthy lifestyle and betterment of the employees. The employees work while the employers pay the number of their bicycles and other pieces of equipment.
The maximum amount paid by employers is £1000. Later on the employee through the salary sacrifice procedure can replace the amount to the employer. The amount gets cleared by the employee between 12 to 18 months. This helps the employee to own the bicycle and all the equipments. Eventually, arrangements help in transferring ownership or authority to an employee after the scheme period ends. Through these schemes, employees will be able to boost and enhance the significant green credentials. They will even be able to save about 13.8% of their money on NICs. Bike shops offer such schemes. So employees should sign up for such offers. This helps them in their future and valence in the present stage.
- Arrangements for salary sacrifice: As the name suggests, this involves the sacrifice of an employee. The employee has to give a part of their official salary in return for non-monetary benefits. This arrangement helps in saving for the employee as well as the employer. This helps the employee in some way. For example, he needs to pay less national insurance and income tax. On the other hand, the employee needs to pay low NICs.
- Administrating arrangements of salary sacrifice: This arrangement is formed through the administered cost or the payroll. But before starting, such an arrangement is significant to take essential tax advice. It is because many technical aspects need to be made clear before jumping into the main thing.
In this case, the salary sacrifice of the employees does not help the employer in any way. This means that employers do not get the benefit of paying Less NICs.
- Share-save scheme: Employees are encouraged to join this specific scheme every year. Employees who have been a part of the organization for a minimum of three months can join. In this scheme, there is a saving purpose. In the end, the employees can take back the money which they have saved. On the other hand, you can use this saved money for owning the discount coupons of Sainsbury’s.
Disclaimer: This content is not based on a legal statement. There is no legal advice on this piece of information. If you need legal information, you need to take advice from legal advisors. This piece of information is not enough.