Hi all,
For those of you who offer employees to pay for voluntary insurances (e.g. dental, health cash plan, travel insurance etc.) through payroll deductions can you please advise if you process these as net pay deductions i.e. NIC is applied as well as tax?
Our payroll team are asking the question and I wanted to double check and it's been a few years since I've looked at this.
Thanks
we changed ours from gross to net a few years ago to save the P11d administration.
Will all need to go via payroll by 2026 anyway in the UK.
We use gross deductions however the premium for cover (regardless of who pays - we have an element of company funding) is taxable and so we report via the annual P11D process accordingly.
Helen - thank you.
Janette - Thank you too. We don't use salary sacrifice for anything at the moment and for something like this I was thinking net pay would be best but wanted to check.
We do expect to launch salary sacrifice for pensions this year and maybe salary sacrifice cars later.
Hi Taz - we looked at this when we did our new benefits platform implementation last year. In the end we concluded that the additional checks required for NMW purposes were onerous and given the amount saved for most people is just 2% it is not worth doing for low cost voluntary benefits. We do use it for Techscheme however. Other full salary sacrifice benefits are more popular such as Cars and Cyclescheme