What are the benefits of giving perks to employees?
Happy employees tend to stay put, reducing the risk of them taking their knowledge, talent, and skills somewhere else. Creating a more comfortable and rewarding environment for your staff can have a huge impact on morale and productivity.
It not only shows that you appreciate the work they put in, but it also means you have a better chance of holding on to valuable employees and finding the best people. Recruitment can be competitive (and expensive), so the value-added perks you offer might help you to attract the best candidates, and keep them.
What sort of staff perks are there?
Unlike more formal performance-related bonus schemes, staff perks aren’t normally a contractual right. This means you can be as flexible and creative as you like, providing benefits to help staff feel more satisfied and appreciated, such as:
Company cars are a popular perk, especially if employees need transportation to carry out their job. The other good thing about company cars is you can add things like branding, company web addresses and phone numbers to them. Perfect for a bit of promotion! You can also choose the car brand you want or go greener with a fleet of electric cars.
Instead of offering a company car, you could consider providing a car allowance instead. It’s often a lot less hassle, because you don’t need to go hunting for a suitable vehicle, pay the up-front cost, or pay for maintenance and servicing. Bear in mind though that you do have a legal responsibility to make sure your staff member’s car is MOT’d, taxed and in road-worthy condition.
No two health insurance policies are the same. They all tend to offer a core cover, with the option to include extras that tailor the product according to your needs and budget. Examples would be optical, hearing or dental care or mental health support. It’s worth shopping around to find a good fit.
Company share schemes can be used as a way to ‘share’ some of the benefits of being a shareholder with your employees. Owning shares can be quite attractive for employees because it usually means they’re entitled to dividends from the profits that their work helps to generate. You can even set up different types of shares, so you don’t have to pay the same rate of dividends to everybody.
Some employee share schemes come with tax advantages for those in them, although there are additional reporting requirements if you go down this route.
Yes, some do, so it’s worth double checking that the perk you’re offering doesn’t have tax implications for your employee (and National Insurance for you)!
Known as Benefits in Kind, employees will generally need to pay tax on the value of some perks they receive, such as company cars or medical insurance. As their employer, you’ll need to make National Insurance contributions on these too. You can either report these to HMRC through your normal payroll (imaginatively known as ‘payrolling’) or by submitting a P11D Form at the end of the year.
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What tax-free benefits could I offer my employees?
Sometimes it’s the small things that matter, so you might also want to consider these tax-free perks too.
Trivial benefits (including a good old Christmas party!)
Trivial benefits are basically small ‘token gifts’. They come in various shapes and forms such as bottles of wine or beer, homemade goods, tins of biscuits, or team lunches.
When December rolls around there are also lots of reasons (including tax ones) why throwing a Christmas party for your staff is a good idea after a long year.
A fair proportion of your team will probably head off at some point every day to buy lunch, snacks, and drinks. This can take quite a bit of time out of their day, especially if there’s traffic or a long queue to pay.
A great perk is to offer a selection of food and drink on the premises, for example via a vending machine. This could either be at a subsidised cost or even for free. Your staff will love you for it because who doesn’t fancy a free lunch? Plus, it helps to subtly cut the amount of time they’re away from the office, so helping to increase productivity.
By offering a choice of healthier foods where possible, you’re also giving your team the energy boost they need when that 3pm slump hits. Focused, well-fed minds concentrate better after all. What’s not to like?!
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A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible. Learn more about Elizabeth.