Employer Savings

 

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Employer savings

Employers save the Employer's NI contribution that would normally be paid on that portion of salary . This is currently set at 13.8% of any benefit amount, up to the maximum allowed

Assuming that your employee's take the maximum allowance for their tax rate, the savings would amount to

  • £402.41 per annum for all 20% tax payers, and 40% and 45% tax payers joined before 06/04/2011
  • £205.34 per annum for all 40% tax payers joining on or after 06/04/2011
  • £182.16 per annum for all 45% tax payers joining on or after 06/04/2011

If the company has just 10 employees on 20% tax that take up the scheme the company could save over £4000, which more than compensates for the cost of the scheme in service charges and internal admin

Note - At the start of every tax year the employer needs to carry out a 'basic earnings assessment' for all employees on the scheme, and any new scheme joiners have to be assessed during that tax year. They are allowed to use P35 information as well as contracts of employment to calculate the tax rate they think their employees will be on. This will then determine the maximum Tax and NI free allowance

Call us on 0800 088 7315

For employee savings click here