As the furlough scheme comes to an end many businesses are resorting to redundancy in order to reduce their salary bill through tricky times. However if the workload is not redundant, and you still need your employees, here are 3 ways to cut your salary bill.
1. Offer flexible working hours.
This can be done by offering a holiday purchase scheme such as HolidayFlex, allowing employees to purchase additional annual leave through salary sacrifice. So you, as the employer, save on the salary bill as well as the salary sacrifice savings.
For example a basic rate tax payer earning £25,000 per annum.
|Amount of additional holiday||Percentage of pay||Reduction in Gross salary (over 12 months)||Reductions in monthly net pay||Total reduction in net pay (over 12 months)||Overall savings for the employee||Overall saving for the employer, including NI saving|
|3 Working days||1.15%||£287.50||£16.29||£195.50||£92.00||£327.18|
Simple to set up with a minimal administration fee, our scheme is better than cost neutral. We provide a simple online application for employees, HMRC compliant salary sacrifice agreements and clear payroll information.
2. Offer a salary sacrifice green car scheme rather than company cars.
A small number of your employees may benefit from a company car; why not offer a salary sacrifice car scheme to all your employees? With no upfront costs, employers save on the cost of leasing company cars whilst making salary sacrifice savings. Employees enjoy a brand new low emission car whilst saving on tax and NI.
Some real life examples;
|Car||P11D value||Monthly rental value for employee||Annual employer saving per vehicle*|
|MG MOTOR UK ZS ELECTRIC HATCHBACK 105kW Excite EV 45kWh 5dr Auto||£28,440||£359.65||£595.56|
|MERCEDES-BENZ C CLASS DIESEL SALOON C300de Sport Edition 4dr 9G-Tronic||£42,960||£637.16||£462.36|
|MERCEDES-BENZ A CLASS HATCHBACK A250e AMG Line Executive 5dr Auto||£34,425||£440.56||£444.56|
Workplace Cars offers a fully-managed and all-inclusive package for you and your employees. We offer full support for your scheme implementation, clear HR and payroll information and assistance with promoting your scheme to maximise your savings. And all with no administration fee!
3. Offer a cycle to work scheme to maximise your NI savings.
Demand for cycle to work schemes has been unprecedented since lockdown earlier this year. Offering a safer, cheaper alternative to public transport, the Government is also promoting cycling by investing in new cycle routes.
Watch how your savings grow with Workplace Bikes.
|Value of bike:||£550||£1,000||£1,500||£5,000|
|Employer NI saving per bike||£75||£138||£207||£690|
Ten employees earning £25k a year purchase 3 days annual leave and purchase a bicycle through Workplace Bikes. This could, on average, save you up to £5,340 a year.
If those same ten employees chose a car instead of a bike, you could save over £9,200 a year.
If you feel you are missing out on savings, are interested in reducing your salary bill, or simply want to know more about what salary sacrifice can do for you, get in touch!