It’s a simple benefit and normally the amount paid is based on multiples of salary. As a benefit, it helps show you care and often forms a core element of a modern benefits package. It also provides financial reassurance for family and dependants and protects your business in the event of the death of an employee.
ABC Ltd decided they would provide a tax-free lump sum payment to their employees. They chose a 4 times multiple of salary, with an overall benefit of £955,408 to its 12 employees, which cost the business an annual premium of £504.46.
benefits to the employer:
The registered schemes premiums are usually allowable as a business expense, thereby reducing the net cost to the employer through corporation tax relief.
benefits to the employees:
Additional free services, which include: