Benefits

The most common benefits are used to reimburse money paid by the employee to do their job. Other benefits are usually awarded as part of a contract of employment, or as a perk by an employer.

Good to know...

• Some benefits are reimbursements for payments made to the employee needed to do their job.

• Employers may owe employers national insurance A system of contributions paid by workers and employers in the UK, which funds various state benefits, such as the State Pension and Jobseeker's Allowance.. Class 1A Employers pay these directly on their employee’s expenses or benefits. NI.

• Benefits with a physical item or subscription have a 'Cash Equivalent'. The employee is receiving the cash value of the benefit.

• Benefits can be known as Benefits in Kind (BiK A benefit-in-kind (BIK) is any non-cash benefit of monetary value that you provide for your employee. These benefits can also be referred to as notional pay, fringe benefits or perks. The benefits have monetary value, so they must be treated as taxable income.), Payrolling Benefits in Kind (PBiK) or P11D.

• HMRC His Majesty's Revenue and Customs is a non-ministerial department of the UK Government responsible for the collection of taxes, the payment of some forms of state support, the administration of other regulatory regimes including the national minimum wage and the issuance of national insurance numbers. Guide: Expenses and benefits for employers. External website

• HMRC Guide: Expenses and benefits: A to Z. External website