22 April 2021
Are you aware by conducting a review of your Employee Benefits you could potentially make significant National Insurance savings?
Our Employee Benefits team are increasingly speaking to clients about the benefits of this exercise.
In some instances, businesses are saving the equivalent of an employee’s yearly salary. In this blog and accompanying infographic we set out the 3 ways your business could save.
1) Smart Pension Saving
Operating a successful Salary Exchange Scheme could help both you and your employees make valuable NI savings.
In some cases, the employee may take home a larger amount, even with the same pension contributions through salary sacrifice.
The employer will save on their 1a National Insurance Contributions.
2) Cycle to Work
Promoting Emotional, Environmental and Physical wellbeing for employees at the same time as making savings for both you and them.
A cycle to work scheme is an employee benefit that could save your team between 25-39% on a bike and accessories. The employee pays nothing upfront and the payments are taken tax efficiently from their salary by you, the employer.
Previously there was a spend cap of £1000 on a bike and accessories but this has now been removed. Which means greater savings for both the employee and the employer.
The employer will receive a relief from paying 13.8% National Insurance contributions on the total amount.
3) Ultra Low Emission Vehicles
Providing your employees with a more carbon efficient and affordable method of travelling could potentially ‘drive’ down NI contributions even further.
There is an ever-increasing focus on reducing our carbon footprint, and with government initiatives to reduce production of diesel and petrol cards there is a shift towards electric and hybrid cars.
For a car to be eligible they must produce 75g/km of C02, those producing zero C02 are currently subject to 0% tax through this scheme, which increases by 1% each April.
This scheme gives employees access to cars they might not otherwise be able to afford, and provides the employer with an opportunity to offer a benefit which has a positive impact on the environment.
Car leasing schemes for electric vehicles cover the administration work that goes on behind the scenes, the employee will pay a regular amount to cover car lease, insurance, and maintenance.
How you could save a salary?
The below infographic demonstrates how you could potentially benefit from National Insurance Savings. The case study used is based on 200 employees, and employee take up assumptions. Should you wish to learn more about how you could benefit from a review please get in touch with our team by following the details below.
Contact: Mark Pugh, Head of Employee Benefits - email@example.com