There are many different employee benefit solutions available today, including health insurance, car leasing, and much more. For working parents, the option of childcare vouchers is something that really appeals. We will reveal more about salary sacrifice, from biking to work to childcare vouchers, in this post.
What is salary sacrifice anyway?
Firstly, we need to explain what salary sacrifice is. As the name suggests, this is when an employee agrees to give up part of the cash pay they receive during their employment in return for some form of non-cash benefit. In this case, the benefit would be childcare vouchers. In most cases, the benefit has substantial financial and personal value, which is why employees decide to give up their salary for it.
Childcare vouchers represent an excellent option
As you well know, childcare is expensive here, and most working parents end up spending a large chunk of their wage on this. This is why childcare employee benefits are extremely advantageous, especially for single parents whom really struggle in this regard. Such employee benefit schemes do not only benefit employees, but they benefit employers too. You will be able to set your business apart from the competition, attracting the best talent and retaining high caliber employees. You will also boost morale and productivity levels, and there are tax benefits as well. It is a good idea to work with a specialist in employee benefits when implementing this type of scheme, as there are a number of different options to choose from.
There are some important points to be aware of when it comes to childcare employee benefits solutions. Firstly, for employees to determine whether they would benefit from this solution, it’s quite simple. They need to work out whether the amount of their qualifying childcare expenses are more than the current childcare limits. If so, they will benefit from this scheme. Of course, if you have a young group of staff, and there are not many parents, this scheme probably isn’t the right option. If you do have a lot of working parents as part of your team, talk to them first. Find out whether this scheme would be something they are interested in – don’t simply assume. A lot of workers may have family members who look after their kids while at home, and so it may be better to look at a different type of salary sacrifice scheme to implement. It is also worth pointing out that families that receive these childcare vouchers cannot go on claim the childcare element of the working tax credit on the same costs.
As you can see, there are many benefits associated with these employee benefits solutions. As an employer, you can boost morale, productivity, and retention levels by offering such a perk, plus there are tax benefits too. You will be shocked by how much of a benefit this can have on your business.
Another option to consider is the Bike To Work Scheme
Riding your bike to work under the bike-to-work scheme is an option well worth considering. It is a great way to make savings on a new bike while also getting fitter in the process. As an employer, this offers many benefits for your business, from financial savings to a more productive workforce. =
If you have any questions regarding this salary sacrifice scheme, we hope you will find the answers in this post.
Will you have to ride a bike to work every day under this scheme? A lot of people fear that they will never be able to drive to work again. Don’t worry; no one is going to check up on you. Of course, using your bike as part of your daily commute is the aim of the bike to work scheme but the general rule is the bike should be used for no less than 50% of the time and this can be just for part of the journey. Nevertheless, if you are running late or you are simply not feeling up to it one day, you are not going to find yourself in any trouble for taking an alternative mode of transport instead of riding your bike to work.
Of course, if you are an employer, you may also have some questions. For example, who can participate in the scheme? Any type of employer from any industry can take part in the bike-to-work scheme. To be eligible, for the salary sacrifice arrangement, employees gross salary should not go below National Living employees should earn more than the National Minimum Wage once salary sacrifice has been deducted, and they must also receive their salary via the PAYE system. Under 18s are able to join the scheme, so long as their guardian will sign a guarantor agreement, and there is no credit check for any employees wishing to participate.
Is there an Open Framework Agreement? Yes, public sector organizations can take advantage of an Open Framework Agreement.
What is the maximum certificate value workers can choose through the scheme? $1,000 including VAT is the maximum certificate value per employee. There is a higher value of $4,500 for employers that have Consumer Credit Authorisation from the Financial Conduct Authority (FCA).
Can those who are self-employed join? If you receive a salary via the PAYE system, you can sign-up as an employer and participant. Otherwise, you won’t be able to.
Hopefully, you now have a better understanding of the bike-to-work scheme, irrespective of whether you are an employer or you are an employee thinking about riding your bike to work. This is a great scheme for all involved, and there are hundreds of thousands of participants across the country.
Don’t forget about other ways you can offer your employees a better place of work
Of course, there are other approaches as well. One thing that we have seen a lot of over the past 18 months is remote work, and so offering a schedule that is flexible and helps your employees to enjoy a better work/life balance can make a big difference. Check out examples of 9/80 work schedules for more information about one option that you can consider.
Aside from this, providing training opportunities is something else that you can do to boost retention and keep your employees happy. One of the main reasons why a lot of people leave their jobs these days is because they feel like there are no opportunities for progression. You can change this by providing great opportunities for development and training at your business.
So there you have it: an insight into some of the great schemes that you can put in place to benefit your employees and ensure retention levels are as high as possible a your business. You would be nowhere without your employees so it is imperative that you give back and look after them too.
What do you think?