If you are an employer looking for a cost-effective way of providing your employees with laptops, a laptop salary sacrifice agreement could be the perfect solution for you. This arrangement allows your employees to obtain a laptop through your company, without having to pay the full cost upfront.
A laptop salary sacrifice agreement is a type of employee benefit scheme that enables your staff to pay for a laptop over a fixed period of time through salary deductions. This means the employee will benefit from tax savings, as the cost of the laptop is taken from their pre-tax salary. As an employer, you also benefit from National Insurance Contributions savings (NICs) which are payable only on the reduced amount of salary.
So, how does this work in practice? First, you will need to select a laptop or range of laptops that you would like to offer to your employees. You can either purchase the laptops outright or arrange a lease, depending on your preference.
Next, you will need to draw up a salary sacrifice agreement that outlines the terms of the scheme. This should explain how the scheme works, how long the employee will pay for the laptop, what happens if the employee leaves the company before the end of the term and any other relevant details.
Once your employees have signed the agreement, they can start making salary deductions to pay for their laptop. The cost of the laptop will be spread over a number of months, typically 12-36 months, depending on the agreement. After the agreed term has elapsed, the employee will own the laptop outright.
It is worth noting that there are some potential drawbacks to laptop salary sacrifice schemes. For example, employees may end up paying more for the laptop than they would if they purchased it outright, due to interest and handling fees. Additionally, if an employee leaves the company during the term of the agreement, they may be required to pay back the outstanding amount on the laptop.
Despite these potential downsides, a laptop salary sacrifice agreement can be an attractive proposition for both employers and employees. By offering laptops as an employee benefit, you can help to attract and retain top talent, while also benefiting from tax savings and reduced NICs. Meanwhile, your employees can enjoy the convenience of owning a laptop without having to pay the full cost upfront.
If you are considering setting up a laptop salary sacrifice agreement for your employees, it is important to seek advice from a qualified professional who can help you to navigate any potential pitfalls. With the right guidance and a clear understanding of the terms of the agreement, a laptop salary sacrifice scheme can be a win-win for everyone involved.