Love2shop has unveiled a new online calculator that simply shows employers how they can save money while giving staff valuable rewards.
The Tax-Free Gift Calculator tool is free to use and makes it easy for employers to see the real cost of their planned staff rewards – including their tax and National Insurance obligations – compared to offering gift cards, which can be given tax-free up to £50.
For example, an employer providing 250 members of staff with a £50 bonus could save up to £12,000 in additional costs simply by providing gift cards instead of a cash payment.
These savings are thanks to HMRC’s Trivial Benefits Allowance, which allows employers to gift up to £50 in Love2shop gift cards completely tax-free.
The brand said it could be a game-changer for those involved in the administration of employee rewards and recognition, including HR teams, procurement departments, SME business owners and department heads. In some cases, the savings could be almost 50 per cent.
Users of the Tax-Free Gift Calculator, which has a simple, user-friendly interface, can input the number of employees they wish to reward and the amount of the bonus they want to provide.
Whether it's a Christmas bonus or any other form of recognition that is not performance-based, the tool offers a side-by-side comparison of the costs involved when processing these rewards through payroll for both lower-rate and higher-rate taxpayers.
This means that employers can easily assess how much they would need to allocate for National Insurance and taxes related to the bonuses.
Additionally, the calculator instantly compares the cost of providing the same bonus in Love2shop gift cards.
This feature allows businesses to clearly see how much they can save by switching to tax-free gift cards, while still ensuring that employees receive the same value in rewards.
When utilised effectively, the Tax-Free Gift Calculator and subsequent rewards program provide a bonus to the employer and their staff, the brand noted.
Employers will significantly reduce the financial burden of providing bonuses to higher-rate taxpayers, potentially saving nearly double the value of the award. Meanwhile, employees will enjoy more of their hard-earned bonuses, as tax-free gift cards enable them to keep more of their money.
"We believe our new Tax-Free Gift Calculator will be an invaluable asset for businesses of all sizes,” Frank Creighton, director of business development at Love2shop, said.
"It not only streamlines the reward administration process but also demonstrates that companies can simultaneously cut costs and enhance employee satisfaction.
"The potential savings are truly remarkable, and we are excited to make this tool available to businesses looking to optimise their employee reward programs.
"We're committed to helping businesses make informed decisions about their employee reward strategies. Tools like this are a big step in the right direction.
"By using our calculator, businesses can pave the way for more efficient, cost-effective, and rewarding ways to recognise and incentivise their workforce."
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