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Sometimes earning more can leave employees with less

 

A pay rise isn’t always just a simple pay rise

 

And I think employers could do more to help employees understand how their pay & benefits really fit together

 

And how benefits can be a tool that can impact tax rate & much wider non company benefits

 

Take someone earning around £100k+

 

At that point, things start happening that they might not be aware of or understand

 

Like their personal allowance can start reducing

 

Or if they have children, their income could affect their eligibility for things like Tax-Free Childcare or funded childcare

 

And while I’m absolutely not saying that HR should be giving out tax advice

 

Benefits like a workplace pension - through salary sacrifice, can affect taxable pay,

 

Other sal sac benefits such as Electric Vehicles can change how employees structure their overall package

 

And if their eligibility to government benefits is based on their taxable pay – it could potentially impact that too

 

Education as to how all of these things fit together may be so much more valuable to employees than you paying to add new benefits into the mix

 

If you’re offering salary sacrifice, pensions, EVs and other benefits, do employees actually understand:

what they are

 

how they work?

how they can impact tax rates and benefits?

what income thresholds they should be aware of?

when it might be worth getting independent financial or tax advice?

 

Benefits aren't separate from pay…and pay isn't separate from the rest of someone's finances – and I increasingly think it’s our role as employers to help people – especially those that are new to earning these types of amounts – understand the full impact

 

Because it’s all well and good giving someone a salary increase – but the last thing we want is for them to be worse off as a result of it!

 

And salary sacrifice benefits don’t just benefit employees

 

If you don’t already offer salary sacrifice you could be missing out on Employer NI savings too – which could either fund other benefits initiatives or savings that make you look good to finance!

 

(And the switch is easier than you’d think)

 

So before you buy another benefit, make sure people understand the value of the ones you've already got -  both what the benefit is in itself and also how it can really impact them and their money

 

If you want to know how you can make your benefits work harder for your business AND your team without spending more drop me a message or book a call