One-Fifth of Companies Offer Salary Sacrifice Schemes

Why are they so popular?

In recent years, salary sacrifice schemes have become an important part of employment for businesses all over the country. It offers employees the option to part with a small percentage of their salary in return for a non-cash benefit.

They offer a wide selection of benefits for all involved. These range from childcare vouchers to increased pension contributions. Their popularity is shown by the sheer amount of companies who have rolled these out to their employees.

According to Personnel Today, almost 60% of businesses now offer salary sacrifice schemes. They’re perfect for all employees and add value to employers. Car salary sacrifices are no exception. This evidences with almost a third of employers offer car salary sacrifice schemes to their employees.

Prevalent in a Range of Business Sectors, But Why?

The main reason is undoubtedly the minimal risk they offer to businesses.

In this competitive business world, salary sacrifice schemes have stood out as a way to provide exceptional employee benefits. They also improve employee retention, all this without costing businesses money! XpertHR claims the most popular way of offering flexible employee benefits is to provide a salary sacrifice option, no matter the company’s size. No more is this incredible benefit exclusively for large/medium sized organisations

Their popularity is widespread with both employers and employees, and depending on the benefit, both can enjoy tax savings. Taking the money out pre-tax, they are great for rewarding employees whilst working almost silently for employers. However, as employees are effectively earning a lower salary, both employer and employee pay lower National Insurance Contributions (NICs).

As mentioned above, these sacrifice schemes are one of the most popular for offering significant benefits. For example, a new car, complete with lower running costs but without the hefty prices that come when upgrading. They are almost risk-free and provide tangible solutions. Especially for employees struggling to afford a new vehicle, whilst maintaining employee loyalty and job satisfaction. If you’re interested in how a salary sacrifice scheme works, take a look at some of our other blogs, or get in contact with us today, we’d be happy to answer any questions you may have.

Last Updated: September 2021