There is often the perception from employers that offering staff benefits could have a costly impact on the business.
However, certain work benefits cost next to nothing and could make a difference to employee satisfaction or productivity in your workplace.
According to a study by payment solutions specialist Paymentsense, unlimited holiday and ‘early finish Fridays’ were the most desirable, cost-effective benefits among 35% of full-time employees.
Out of 2,000 working adults surveyed, 30% said they would also like more flexible hours and another 25% wanted better performance-related bonuses.
While more than a third desired unlimited holidays, just 5% were willing to sacrifice between 11% and 15% of their salary to take as much time out as they wanted.
However, 20% or respondents would give up to 15% of their salary for the chance of flexible working.
Costs on employers
Paymentsense asked a company to break down each of the costs attached to work-based benefits they provide.
The business incurs the following monthly costs to provide employee benefits to its 70 staff:
- Pension – £7,544
- Health insurance – £3,150
- Team social events – £1,200 (per event).
Salary sacrifice arrangement
With some respondents willing to sacrifice part of their salary for non-cash benefits, and employers looking to reduce costs, a salary sacrifice could save you money if the benefit is tax-free.
Tax and national insurance contributions (NICs) will apply depending on the arrangement, so it is important for you to check the rules and implement them correctly through PAYE.
Furthermore, rules on salary sacrifice arrangements were changed so tax and NIC savings no longer apply for new arrangements made or entered on or after 6 April 2017.
Arrangements made before this date are protected for up to 1 year, while arrangements involving cars, accommodation and school fees are protected until 6 April 2021.
Pensions, childcare and cycle to work are exempt from the changes.