Basic pay and benefits

Updating author: Ian Holloway

Brightmine editor: Zuraida Curtis

Summary

• The contract of employment should make clear any provisions relating to overtime and benefits. (See Basic pay and overtime and Benefits and the contract of employment)
• Employers are prohibited from offering inducements to opt out of a workplace pension scheme. (See Pensions auto-enrolment and inducements)
• Bonus schemes may be contractual or discretionary. (See Bonus schemes)
• Share incentive plans enable employees to receive a certain value of free shares in the employer's business per tax year. (See Employee share schemes and employee share ownership plans)
• Some employers must report on ratios comparing the pay of the chief executive officer with employees. (See Executive pay ratio reporting)
• Tax and national insurance exemptions apply to "trivial" benefits in kind. (See Trivial benefits)
• Company cars and vans are taxable if they are available for private use. (See Company cars and vans)
• Health treatment or insurance paid for by an employer is a taxable benefit. (See Medical insurance)
• School fees reimbursed to employees are liable to income tax and national insurance but certain exemptions apply for childcare provision. (See School fees and childcare provision)
• The Government contributes towards the childcare costs of working parents. (See Tax-free childcare scheme)
• Meals provided on a free or subsidised basis to all staff are generally not taxable. (See Food)
• Relocation expenses are usually free of any charge to tax and national insurance up to a certain limit. (See Relocation expenses)
• Living accommodation is taxable unless specific exemptions apply. (See Accommodation)
• Certain termination payments are free of tax and national insurance. (See Termination payments)

Note: Sick pay, holiday pay, payments for workless days and gender pay gap reporting are dealt with in the context of the appropriate statutory schemes.