The last few weeks of the year can be an expensive time for both employers and employees. Have you found ways to manage these costs?
Over the years, I’ve found a few practical ways to make it easier to manage my end of year costs when it comes to rewarding staff and funding a work Christmas party.
My top tip is to open a deposit account and lodge some money each month which you can then use to fund things like the Christmas party and vouchers for your team. Having funds available when you need them helps reduce stress at what is often a very busy time of the year.
Keep it reasonable!
When planning your Christmas party, bear in mind the Revenue rules which state:
“Where an employer provides staff Christmas parties, special occasion meals or other inclusive events, such as sports days for staff, a taxable BIK will not be treated as arising where the expenses are reasonable, and the event is open to all employees.”
Revenue also provides guidance for virtual events:
“Where an event is held virtually, reasonable costs will include costs which would typically be incurred in hosting a face-to-face party or event. This includes the cost of delivering or providing food and drink to employees in advance of, or during, the event.”
When it comes to helping staff save for Christmas, some employers facilitate saving via payroll—for example by facilitating payroll deductions for staff who are members of a credit union saving club. There are pros and cons to savings clubs. If you are considering facilitating one or setting up your own company club, it’s important to do your homework.
Many employers avail of the Small Benefit Exemption Scheme to give their employees vouchers. This is a tax efficient way to reward staff for their hard work. Rather than wait for the end of the year, a practical tip is to give your employees their vouchers early as this enables them to use the vouchers to help pay for their Xmas shopping.
Has your business found other ways to cope with the costs of Christmas and/or to help your employees manage their individual costs? If yes, we’d love to hear about them!