Is Salary Sacrifice cost neutral to your business – are you sure?
Benefits these days are few and far between so when as a business you are able to offer a benefit that is a “neutral cost” you’d be crazy not to offer this to your staff, wouldn’t you? Be sure to check the small print!
Remember that part-time staff are entitled to the same terms and conditions as full time staff, albeit on a prorated basis. Employees on maternity leave and absence for other protected characteristics are entitled to be paid all benefits in full; this includes all salary sacrifice benefits, for example childcare vouchers & pension.
This means when an employee is on additional maternity leave or on leave of absence due to a protected characteristic, the same level of benefit has to be provided, even when they are on unpaid leave. When reading the small print, this requires that you as the employer have a legal obligation to pay the full amount of the benefit so the same level is maintained even if the employee is not getting paid. It is unlawful to withhold these benefits as to do so would be discriminatory.
Salary sacrifice benefits are normally seen to be cost neutral to employers, with the NI savings funding the administration. However, you do need to think carefully and review the legislation. Offering these benefits shows your employees that you care but you must always ensure you remain in control of your cash flow.
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