When thinking about implementing a tax efficient benefit strategy, it is important to take in to consideration the benefits and the risks, or difficulties, of implementing such strategies within your own work environment or company. One thing is certainly clear – there is most defiantly a new trend, whereby employers are able to initiate comprehensive benefit programs with their employees and be rewarded with happy staff and a better working environment. But how do employers feel about these benefit schemes? Are they a wonderful way to have a well-functioning and effective work place; or is what seems serene on the surface just a problem waiting to happen for the administrative team?
We already have a number of more traditional tax exemption payroll deduction schemes that have gone down extremely well with many employees; child care vouchers, cycle to work schemes and employee shares have all had positive feedback from staff members. These schemes have become more commonplace in many work environments and it is now an everyday occurrence for many companies to employ their staff in an increasingly resourceful manner – offering home technology, study loans and even lunch the tax efficient way!
But how easy is this to achieve? And are the rewards that come with it really that popular and that worthwhile? Payroll deductions can often be time consuming and daunting to implement successfully and require cooperation from the whole team. It is not a simple process and if carried out inaccurately or reluctantly will not have the necessary effect for you as a business, or your staff. It is important that you have a forward thinking team, dedicated to the new style of employment and who are supported by all areas of the business, including finance and payroll, in order to make it happen.
Then, even with a top class team behind you, you still need to convince the staff. Many groups will welcome the change; those with children will be thankful for the childcare vouchers, and those with homes will enjoy the DIY gifts. But without a doubt, the hardest group to convince of these benefits are the younger employees. These groups tend to prefer ready cash, rather than rewards, so coming up with a scheme to suit them can be difficult. Think about what the younger generation need – technology springs to mind. Offering a home-technology reward may just get them on board, and seeing their faces when you present them with their new iPad or entertainment system will just prove that you made the right choice.
The key to salary sacrifice is to embrace the change and support it. If you can approach your staff with a positive attitude, they will see the change as positive. Salary sacrifice is a scheme that certainly makes sense for both the employers and the employees. Providing a scheme to your employees that saves both parties money cannot be a bad thing and if you have the skills, the knowledge and the team behind you to implement it successfully, although it will take time, you will see the results of your hard work very quickly.