Does your company offer payroll giving?
Thursday, 10 May 2012
During late December 2011 and early January 2012, the Chartered Institute of Payroll Professionals carried out a survey to discover what kind of employee benefits companies are currently offering to the people who work with them. The results are quite interesting and offer an insight into the types of benefits that are the most popular among many companies.
One of the key results of the survey by the CIPP is that more than 70% of the people who responded currently work for employers who offer benefit schemes involving salary sacrifice. For example, many of these employers offer benefits such as childcare vouchers or pension contributions in return for the employee sacrificing a portion of their salary. This is a popular thing to do and it requires companies to have the right systems in place, such as measures on their HR and payroll software, to ensure it is properly administered.
In terms of the benefits on offer, the CIPP's survey found that pension contributions were the most popular benefit offered by employers. 77% employers were found to offer this benefit. We can also expect this figure to rise significantly later in 2012 when employers will be required to automatically enrol employees onto a pension scheme. The next most popular benefit on offer from employers was childcare vouchers. 73% of employers were found to offer the people working for them this benefit. Also, almost half of them (49%) enabled their employees to take part in payroll giving, which is something else that can be administered through the best payroll software.
All of these statistics show that employee benefits are very popular with many employers. There is also a very wide range of benefits that can be offered to employees and they are not limited to the ones outlined above. For instance, healthcare, qualification fees, cycle schemes, life insurance and training were all identified as benefits offered by employers to their employees.
Also, in some cases, employee benefits are sometimes offered as an alternative to a salary increase. There are quite a few reasons for this happening. One of the big reasons is that the economic climate means that many employers are not able to offer bonuses or increases in pay as they might have done in the past, and so they are looking to other options now, such as the benefits outlined here. Another reason many of the benefits are chosen is because they offer tax benefits.
This is because for many of the benefits, employers are able to make savings on their National Insurance Contributions. One of the benefits of this is that it can help to offset the cost of administrating the benefit, adding to the incentive for the employer to start offering them. The benefits can also help employers to stay competitive in a market where salary increases are perhaps not as common as they once were, and they can help employees to feel valued. This can be seen in the childcare vouchers, for instance. Employers aren't required to offer this benefit, but as it is very popular it makes sense for them to offer it to help working parents with their costs.
Another key finding of the survey mentioned above is that employees rate these benefits as being highly important: 85% of them said that they find the benefits to be either important or very important. This shows the worth and value that they can have.
If an employer is thinking of offering benefits such as these to their employees then it is important that they make sure they put in place the proper systems and administrate them properly, or else they could end up with an invalid scheme. For example, employers might find that they need to make some contractual changes in order for their schemes to be valid; if they do not then they might well end up having to pay an additional tax bill.
This means that if a company is unsure about how to go about administering employee benefit schemes, it worth them undertaking training to make sure they set up their systems properly so they don't end up with unexpected tax bills. For instance, they might find that payroll courses online are useful in educating them in how to go about this.
Overall, employee benefit schemes are hugely popular with employees and they can be of use to employers who are looking to do what they can to value employees even though the economic circumstances might be challenging. Taking the time to administrate them properly will help ensure that everyone involves stays happy.
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