Jennifer Adams looks at some alternatives to rewarding an employee with a pay rise or a bonus.
Despite the reduction in National Insurance contributions (NICs) in Spring Budget 2024, more employees are paying tax at higher rates on their earnings due to the freezing of tax thresholds. Some may find that any pay rise or bonus attracts additional tax and NICs such that the net pay increase is minimal.
Benefits packages
However, it is possible to put together a package of non-cash tax-efficient benefits to reward employees, so that they are better off. Such benefits can include employee parking, staff discounts, holiday buy back, birthday vouchers, Christmas gifts, help with additional homeworking costs, employee suggestion schemes (where tax and NICs-free cash rewards are given to employees to share their ideas, suggestions and solutions to enhance the operations, processes,
