Employers partnered with employee benefits technology provider, Zest, are saving £6.7 million each month on employer National Insurance contributions.
These savings are due to increased employer investment in taxable benefits which reduces employer National Insurance contributions whilst delivering increased value to employees.
In the recent Budget, the Chancellor announced plans to increase employer National Insurance contributions from 13.8% to 15% on a worker’s earnings above £175 a week from April – a move that is expected to cost UK businesses an additional £25 billion annually.
Employers are increasingly embracing salary sacrifice schemes in order to reduce National Insurance contributions. Recent research from the Global Payroll Association found that more than one in five SMES are now more inclined to use these schemes.
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Over four in ten (45%) of employees from Zest’s customers have logged onto the benefits platform over the last 12 months. The average employee monthly spend on employee benefits has hit an average of £62 per month with the most popular benefits including pension contributions, private medical insurance and workplace savings schemes.
Growing importance of employee benefits
Almost half (47%) of UK employees now say that a good benefits package is the most important thing they look for in employment and almost six in ten (56%) employees say they would leave their job if another company offered them a better benefits package.
One in five (19%) businesses admit they are unable to raise employee salaries in line with inflation. However, organisations are increasingly turning to enhanced benefits packages to reward employees as well as attract and retain talent – half (49%) of businesses report that they have increased investment into their benefits package over the past year.
He added, “After the recent Budget, many organisations are increasingly concerned about balancing growth with the increase in NI contributions – investment in employee benefits packages can reduce operational costs, increase productivity and support talent attraction and retention.
“Employee benefits packages are one of the most effective ways that employers can deliver financial support to their workforce – however, they must ensure that not only are they increasing investment in their benefits offering but delivering enhanced value by implementing the support employees are calling for. It’s vital that organisations are improving communication with employees and utilising insights into benefit demand and take-up to gain a better understanding of the support employees need.
“Salary sacrifice is another option employers should be considering to mitigate the impact of rising NI contributions – this approach reduces employee NI payments and benefits both the individual and employer. These savings can then be invested back into offering employees the support they need.”
Zest is an employee benefits technology company with over 500 customers, including Hargreaves Lansdown, Taylor Wimpey, Yahoo and Travis Perkins, serving over 300,000 employees. Its multi award-winning platform offers a fresh approach to truly flexible employee benefits.
