Salary sacrifice schemes have become an important part of employment for businesses all over the country in recent years. Offering employees the option to part with a small percentage of their salary, pre-tax, in return for a non-cash benefit, they offer a plethora of benefits for all involved. Benefits range from childcare vouchers, gym membership and increased pension contributions, to new technology and vehicles. And their popularity is shown by the sheer amount of companies who have rolled these out to their employees.
According to Personnel Today, almost 60 percent of businesses now offer salary sacrifice schemes. Bringing added value to employment, they are perfect for employees of all ages. And car salary sacrifices are no exception – which shows with the fact that almost a third (17 percent) of employers offer car salary sacrifice schemes to their employees.
Prevalent in a range of business sectors, why exactly have they taken off?
The main reason is undoubtedly the minimal risk they offer a plethora of businesses. In this ever financially conscious and competitive business world, salary sacrifice schemes have stood out as a way to provide exceptional benefits to employees and improve employee retention – without costing businesses money. Once almost exclusively for large and medium-sized organisations, according to XpertHR, the most popular way of offering flexible benefits to employees is to provide them with a salary-sacrifice option – no matter what the size of the company. Whether that be something they can use to benefit their whole family, the environment, their future or something just for themselves.
Their popularity is widespread with both employers and employees fans in equal measure. Depending on the benefit, both employees and employers can enjoy tax savings thanks to salary sacrifice schemes. Taking the money out pre-tax, they are great for rewarding employees while working almost silently for employers. However as employees are effectively earning a lower salary, both the employee and the employer pay lower National Insurance Contributions (NICs).
As mentioned above, car salary sacrifice schemes are one of the most popular. offering significant benefits; a new car, complete with lower running costs, but without the hefty prices that can come along with swapping to a new vehicle, they are almost risk free and provide a tangible solution for employees struggling to afford a new vehicle, while cementing employee loyalty and job satisfaction.