Employee Payments – Not just cash wages
Employees are entitled to the minimum wage – in cash for expected hours worked
| Age | Rate from 1 April 2021 |
| 23 and over | £8.91 |
| 21 to 22 | £8.36 |
| 18 to 20 | £6.56 |
| Under 18 | £4.62 |
| Apprentices under 19 or in first year | £4.30 |
These cash amounts may not be eaten into by deductions for example for accommodation, pension contributions or uniform.
But Employees are also entitled to:-
- Holidays – 5.6 weeks paid holiday per year
- Auto-enrolment pension contributions of up to 8%
- Training
- Health & safety
- Breaks
- Statutory Sick pay – at statutory rates, for up to 6 months, funded by the employer
- Statutory Maternity/Adoption leave of up to 52 weeks for primary new parent
- Statutory Maternity/Adoption pay for up to 39 weeks, funded by HMRC
- Statutory Paternity/Adoption leave of up to 2 weeks for partner of primary parent
- Statutory Paternity/Adoption pay for up to 2 weeks, funded by HMRC
- Statutory Shared Parental leave – for up to 50 weeks for either parent
- Statutory Shared Parental pay for up to 27 weeks, funded by HMRC
- Statutory Parental Bereavement Pay & leave for up to 2 weeks, funded by HMRC
- Compassionate Leave – unlimited unpaid time off work to deal with emergencies involving a dependant
Other employee costs:-
Apart form paying staff, do not forget that there are other costs you may have due to employing one more member of staff.
- Employers national Insurance
- Employers liability insurance
- Apprenticeship levy
- Increased fees or subscriptions due to increased employee numbers
- Fee increases especially for payroll
Tax Free Worker Benefits
An employer can also provide to employees the following benefits, with no tax incurred.
- Computer equipment provided for work purposes.
- One mobile phone available for private use
- Protective clothing and equipment
- Uniform intended to make the wearer’s profession recognisable.
- Tools of the trade
- Training
- Professional body subscriptions (Tax free if on HMRC list)
- On-site hot drinks and water
- On-site parking
- Official staff canteen facilities e.g. tokens or swipe card
- Official workplace nursery facilities
- Private gym facilities (not personal membership or a gym open to the public)
- A bicycle, including safety equipment, primarily for business use (business use criteria has been relaxed until April 2022 for bicycles provided before December 2020)
- Eye test, and annual health checks
- Welfare counselling excluding legal, financial, medical treatment and leisure activities.
- Most pension contributions
- Pension’s advice or debt advice up to £150pa
- Trivial benefits – under £50 each (£300pa cap for members of a directors household)
- Staff annual events – £150 per head per annum cap
- Interest free loans up to £10,000
Memo – this is not an exhaustive list, and has not included reimbursed expenses.
Taxable Benefits
An employee may also be provided with benefits in kind that are taxable.
The followings are the main taxable benefits you may consider providing to your staff: –
- Company Car – including electric cars.
- Company Van – taxable if used personally.
- Fuel for private use – taxable unless repaid before 6th
- Medical Insurance, or treatment
- Most life insurance
If you would like to know more about benefits, the
