Time was when there was a real financial reason to offer staff benefits. Years ago, many benefits were exempt from National Insurance (although not tax for higher earners), and a generous benefits strategy represented a real saving for employers and employees.
Today, almost all benefits are subject to National Insurance, and there is an argument that there is little point in retaining any benefits that are not tax or National Insurance exempt.
It is almost impossible to apportion some benefits – half medical insurance for half time workers? Some benefits cost more for older workers, or by gender, where they are based on actuarial data. Employees often have no idea of the real cost of providing benefits and undervalue them when considering the value of their employment package.
Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy. Tel: 08452 303050 Fax: 08452 303060 Website : www.irenicon.co.uk. You can follow Annabel on twitter – http://twitter.com/AnnabelKaye