SALARY SACRIFICE SUPPLEMENTAL MATERIALS

Transcription

1 SALARY SACRIFICE SUPPLEMENTAL MATERIALS Table Of Contents Deductions and Taxes 2 Tech 3 Parking Up Until April Parking From April Car Leasing (Up until April 2017) 6 Car Leasing (From April 2017) 7 Gym 8 Cycle to Work 9 Workplace nursery 10 Childcare vouchers 11 Eligibility 12 Watch our explainer

2 DEDUCTIONS AND TAXES Employer NI represents the Na>onal Insurance Contribu>on which employers pay on an employee's whole salary Na>onal Insurance HMRC Guidance 12% Employee NI Primary Threshold 12% represents the Na>onal Insurance that is deducted from an employee's salary if you are a Primary Threshold Na>onal Insurance payer. Na>onal Insurance HMRC Guidance 2% Employee NI Upper Earnings Limit 2% represents the Na>onal Insurance that is deducted from an employee s salary if you are a Upper Earnings Limit Na>onal Insurance payer. Na>onal Insurance HMRC Guidance 20% Income Tax Basic Rate 20% represents the Basic Rate tax that is deducted from an employee's salary. PAYE Tax HMRC Guidance 40% Income Tax Higher Rate 40% represents the Higher Rate tax that is deducted from an employee's salary. PAYE Tax HMRC Guidance

3 TECH This scheme gives employees a way to purchase and then spread the cost of new computers, tablets and phones. Clarkwood Enterprise The device is bought outright by the employer and the cost of the device is spread across 12 months with payments being made out of the employee's salary. What Savings Are Available: Employee 12% 2% Primary Threshold Na>onal Insurance OR Upper Earnings Limit Na>onal Insurance This benefit is considered a Benefit In Kind meaning there are no Tax savings for the employees, and the employer cannot recoup their Na>onal Insurance Contribu>on. Any outstanding payments due if an employee leaves, can be recouped in the final pay-check. 1. The employee clicks through to the Clarkwood Enterprise Portal. 2. The employee selects the desired item and adds it to the basket. 3. To checkout the basket, the employee will be asked to register their details and acknowledge the T&Cs. 4. The employee will receive an electronic hire agreement to be submi\ed online. 5. The order Confirma>on is passed onto the employer. 6. The employer approves order and se\les the invoice with Clarkwood Enterprise and makes salary reduc>ons from subsequent payslips in equal monthly instalments. 7. The employee receives a no>fica>on regarding delivery and receives the item from DPD

4 PARKING UP UNTIL APRIL 2017 This scheme gives employees a way to purchase a parking permit and split payments over 12 months. Enjoy Benefits The parking permit is bought outright by the employer and the cost of the permit is spread across 12 months with payments being made out of the employee's salary. What Savings Are Available (Up Until April 2017): Employee Employee Employer 12% 2% 20% 40% Primary Threshold Na>onal Insurance OR Upper Earnings Limit Na>onal Insurance Basic Rate Tax OR Higher Tax Rate Na>onal Insurance Contribu>on Enjoy Benefits assume they can nego>ate an addi>onal discount. Any outstanding payments due if an employee leaves, can be recouped in the final pay-check. Parking must be for when employee is at work. 1. The employee logs onto the Enjoy Benefits portal and provides details of the parking loca>on and provider. 2. Enjoy Benefits contact the parking provider to verify fees and additional discounts for buying the permit annually. The fees and savings are then communicated to the employee. 3. Enjoy Benefits then purchases the permit and invoices the employer 4. The employer settles invoice and repayments are made over 12 months from the employee's salary. 5. The employee receives their parking permit.

5 PARKING FROM APRIL 2017 This scheme gives employees a way to purchase a parking permit and split payments over 12 months. Enjoy Benefits The parking permit is bought outright by the employer and the cost of permit is spread across 12 months with payments being made out of the employee's salary. What Savings Are Available (From April 2017): Employee 12% 2% Primary Threshold Na>onal Insurance OR Upper Earnings Limit Na>onal Insurance Enjoy Benefits assume they can nego>ate an addi>onal discount. This benefit is considered a Benefit In Kind meaning there are no Tax savings for the employees, and the employer cannot recoup their Na>onal Insurance Contribu>on. Any outstanding payments due if an employee leaves can be recouped in the final pay-check. Parking must be for when employee is at work. 1. Employee logs onto Enjoy Benefits portal and provides details of the parking loca>on and provider. 2. Enjoy Benefits contact the parking provider to verify fees and additional discounts for buying permit annually. The fees and savings are then communicated to the employee. 3. Enjoy Benefits then purchases the permit and invoices the employer 4. Employer settles invoice and repayments are made over 12 months from the employee's salary. 5. The employee receives their parking permit.

6 CAR LEASING (UP UNTIL APRIL 2017) This scheme gives employees a way of leasing a vehicle and maintaining it whilst splibng the payments over months. Fleet Evolu>on The car leasing costs are deducted from the employee's salary with the cost of being spread across months. What Savings Are Available (Up To April 2017): Employee Employer UP TO 45% Savings up to 45% Regardless of Tax Bracket Na>onal Insurance Contribu>on Employees can save up to 45% regardless of tax bracket. This % varies based on the efficiency of selected vehicle. The employer can save up to. Savings beyond 3.8% reduce savings for the employee. Any outstanding payments due if an employee leaves can be recovered by insurance setup in the scheme. 1. The employee logs onto the Fleet Evolu>on Portal and receives a quote for a vehicle. 2. The employee accepts the quote and places an order. 3. The employer receives quote and advises Fleet Evolution if the employee is eligible for the scheme. Repayments are then made over months from the employee's salary. 4. The vehicle order is placed and delivery arranged with employee. 5. The employee receives contact every sixth months from Driverline (courtesy calls, mileage updates, service bookings, insurance renewals). 6. Six months prior to contract end date, employee is asked if they want to look at a new lease, buy or return the vehicle.

7 CAR LEASING (FROM APRIL 2017) This scheme gives employees a way of leasing a vehicle and maintaining it whilst splibng the payments over months. Fleet Evolu>on The car leasing costs are deducted from the employee's salary with the cost of being spread across months. What Savings Are Available (From April 2017): Employee Employer UP TO 45% Savings up to 45% Regardless of Tax Bracket Na>onal Insurance Contribu>on Employees can save up to 45% regardless of tax bracket. This % varies based on the efficiency of selected vehicle. From April 2017 higher savings will only con>nue for cars which emit less than 75 Co2g/Km. The employer can save up to. Savings beyond 3.8% reduce savings for the employee. Any outstanding payments due if an employee leaves can be recovered by insurance setup in the scheme. 1. The employee logs onto the Fleet Evolu>on Portal and receives a quote for a vehicle. 2. The employee accepts the quote and places an order. 3. The employer receives quote and advises Fleet Evolution if the employee is eligible for the scheme. Repayments are then made over months from the employee's salary. 4. The vehicle order is placed and delivery arranged with employee. 5. The employee receives contact every sixth months from Driverline (courtesy calls, mileage updates, service bookings, insurance renewals). 6. Six months prior to contract end date, employee is asked if they want to look at a new lease, buy or return the vehicle.

8 GYM This scheme gives employees a way to purchase a gym membership and split payments over 12 months. Enjoy Benefits The gym membership is bought outright by the employer and the cost of membership is spread across 12 months with payments being made out of the employee's salary. What Savings Are Available: Employee 12% 2% Primary Threshold Na>onal Insurance OR Upper Earnings Limit Na>onal Insurance Enjoy Benefits assume they can nego>ate an addi>onal discount. This benefit is considered a Benefit In Kind meaning there are no Tax savings for the employees, and the employer cannot recoup their Na>onal Insurance Contribu>on. Any outstanding payments due if an employee leaves can be recouped in the final pay-check. 1. The employee contacts the leisure provider and confirms the upfront costs for a 12 month membership, then logs onto Enjoy Benefits portal and confirms the rates given by the gym. 2. Enjoy Benefits contact the gym to verify fees and negotiates a discount for buying the membership annually. The fees and savings are then communicated to the employee. 3. Enjoy Benefits then purchases the gym membership and invoices the employer. 4. The employer settles the invoice and repayments are made over 12 months from the employee's salary. 5. The gym membership is released to the employee.

9 CYCLE TO WORK This scheme gives employees a way to purchase and then spread the cost of bicycle Enjoy Benefits or Halfords The bicycle is bought outright by the employer and the cost of bicycle is spread across 12 months with payments being made out of the employee's salary. What Savings Are Available: Employee Employee Employer 12% 2% 20% 40% Primary Threshold Na>onal Insurance OR Upper Earnings Limit Na>onal Insurance Basic Rate Tax OR Higher Tax Rate Na>onal Insurance Contribu>on Enjoy Benefits es>mate an addi>onal 10% discount off the cost of the bicycle. Halfords offer free accessories up to the value of 10% of the cost of the bicycle. A fair market value is paid by the employee at the end of the first year. This is 3% if the bike is under 500 or 7% if the bike is under Aher an addi>onal 4 years the fair market value cost is refunded if the bike is returned, alterna>vely the bicycle can be kept and the fair market value is retained. Any outstanding payments due if an employee leaves can be recouped in the final pay-check. 1. The employee locates their desired bicycle and confirms details on the Enjoy Benefits portal. 2. Enjoy Benefits then purchase the bike and invoices the employer 3. The employer settles invoice and the bike and repayments are made over 12 months from the employee's salary. 4. The bicycle is released to the employee. 5. At the end of Year 1 the fair market value is paid. 6. At the end of Year 5, the fair market value is refunded dependant on whether the employee wants to retain the bicycle.

10 WORKPLACE NURSERY This scheme gives employees a way to save money on nursery costs, by crea>ng a partnership with the selected nursery. Enjoy Benefits Once a contract is established between the nursery and the employer (facilitated by Enjoy Benefits), the employer makes monthly payments towards the nursery from the employee's salary. What Savings Are Available: Employee Employee Employer 12% 2% 20% 40% Primary Threshold Na>onal Insurance OR Upper Earnings Limit Na>onal Insurance Basic Rate Tax OR Higher Tax Rate Na>onal Insurance Contribu>on A 10% admin fee is deducted from the employee s savings. A Generous Contribu>on up to the value of 1200 per contract renewal is made from the employer s savings. This represents the employer s stake in the nursery. The contribu>on varies based on monthly nursery costs. Should an employee choose to stop using the benefit before the agreed termina>on date, the nursery funding will con>nue to be paid to the nursery for projects agreed un>l the end of the contracted period. 1. The employee highlights the nursery of choice to their employer. 2. Enjoy Benefits and the employee meet with the chosen nursery to agree plans and actions for operation of the nursery. Minutes of these meetings are sent to the employee and employer. 3. Enjoy Benefits works with the employer to identify costs that should be deducted from employee's salary and what contribution is made by the employer. 4. The employer provides the child a place at the chosen nursery 5. Enjoy Benefits meet with the nursery throughout the period of benefit, reporting the outcome of these meetings to the employer and the employee. Both parties must agree to read these notes and provide Enjoy Benefits with feedback.

11 CHILDCARE VOUCHERS This scheme gives employees a way to save money on childcare by purchasing vouchers which can be exchanged with childcare providers. Enjoy Benefits The employee sets a maximum amount of salary they wish to sacrifice in exchange for childcare vouchers. What Savings Are Available: Employee Employee Employer 12% 2% 20% 40% Primary Threshold Na>onal Insurance OR Upper Earnings Limit Na>onal Insurance Basic Rate Tax OR Higher Tax Rate Na>onal Insurance Contribu>on A 5% admin fee is deducted from the employer's savings. Savings are capped at 243 a month for a Basic Rate Tax payer Savings are capped at 124 a month for a Higher Rate Tax payer. Scheme is ending April The employee logs onto the Enjoy Benefits platform and sets their maximum amount of salary they wish to sacrifice. 2. The employee is presented with an option of how they wish to receive their benefit: A Direct payment is transferred to the Childcare provider. A physical voucher which can then be ed or printed and delivered to the Childcare Provider. A fund can be setup where vouchers are accrued and released whenever needed. 3. Payroll information is communicated to the employer and subsequent payments are made from employee s salary.

12 ELIGIBILITY Sacrificed salaries must not bring an employee below the minimum wage. Employees who earn the na>onal minimum wage are not eligible. Directors who pay themselves a low wage and earn through dividends should check with their accountant first regarding eligibility. If you are self-employed, you are not eligible for salary sacrifice