Here are seven simple ways to grab more from your employer!
In May 2011, there were nearly 29.3 million workers in the UK, according to the Office for National Statistics (ONS). In other words, more than seven in ten (71%) adults of working age are in work.
The wacky world of work
Of course, working life is very wide and varied, as revealed by these facts:
- Almost four in five workers (79%) are in the private sector (23.1 million workers), with the remaining 21% (6.2 million) in the public sector.
- Only 21.3 million of us work full-time, while eight million work part-time (mostly women).
- More than 25 million of us are employees, while four million people are self-employed, like me.
Despite these differences, I suspect that workers everywhere have one thing in common: we'd all like higher pay and more praise for our efforts!
I can't help you with the latter, but I can advise you on how to squeeze more out of employers. Of course, work is much more than a wage, so how many of these valuable benefits and payouts are you missing out on?
1. Bonus
Many organisations have bonus schemes to encourage their employees to work harder. Often, these are linked to key performance targets, often at group, team or individual levels. While most bonus schemes pay out, say, 5% to 25% of salary, a total of £14 billion was paid out to City financiers earlier this year.
Bonuses have fallen back in recent years, but haven't vanished, so work hard to meet your targets, if you have any.
2. Pension
Earlier this week, I was talking with a friend who is in his mid-thirties. During our chat, he guiltily revealed that, despite 17 years working in the NHS, he hasn't joined its excellent pension scheme. This means that he has missed out on very generous pension contributions. While his contribution rate is 5% of salary, the taxpayer adds 14% on top. Thus, I ordered him to join up straight away.
Of course, a generous occupational (work-based) pension scheme is a hugely valuable benefit. In fact, the best schemes can be worth upwards of 25% of salary. Thus, if you're not in your company pension scheme, then look into joining it today.
3. Company car or travel allowance
I've never owned a car, but I've driven company cars during my years as an employee. Having a company car is a terrifically valuable benefit, as your employer bears the cost of ownership, maintenance, repairs and so on.
However, the tax bill generated by a company car can be fairly high, depending on the vehicle's value and CO2 emissions, especially if your fuel bill is paid, too. Even so, driving a company vehicle can reduce your motoring expenses by thousands of pounds a year. No longer will you have to win the Lotto just to fill your tank!
4. Employee share schemes
If you work for a company whose shares are listed on the London Stock Exchange or another recognised stock market, then you may be offered free, cheap or discounted shares in your employer. Obviously, this doesn't apply to all those in the public sector.
The most popular employee share scheme is Save As You Earn (SAYE), sometimes known as Sharesave. Around 2.5 million employees use SAYE to save between £5 and £250 a month for three, five or seven years and then use this lump sum to buy discounted shares. In effect, it's a tax-free savings plan with the potential for stock-market gains on top, but no risk of losing any of your capital.
The next most popular share plans are Share Incentive Plans (SIPs), which allow employees to save up to £125 a month and buy discounted shares with this money.
SIPs don't have the no-lose guarantee that SAYE offers, but they do allow companies to offer 'buy one, get one free' and even completely free shares. Also, these shares are bought from pre-tax income, so the maximum monthly contribution of £125 can cost as little as £60 after tax relief.
I am an enthusiastic advocate of employee share schemes, as I know many people who have made several times their yearly salaries from maximising contributions to these plans.
5. Childcare vouchers
If you're a working parent, then find out what support your employer offers for childcare. For example, some enlightened employers offer workplace nurseries, on-site crèches, holiday play-schemes, or emergency-nanny services during family crises.
[SPOTLIGHT]What's more, many thousands of organisations offer childcare vouchers to help with the cost of raising children. The first £55 a week of vouchers is free from income tax and National Insurance contributions, which means these can cost as little as £26.40 of weekly take-home pay. For two high-earning parents, these vouchers could reduce childcare costs by around £3,000 a year.
6. Life insurance
Buying an individual life insurance policy can be complicated and costly, plus the premiums you pay are based on your gender, age, state of health, occupation, etc.
However, many employers provide free life insurance to their workers, known as ‘death in service’ benefit. Usually, employers will provide cover which pays out three or four times your basic salary if you die in service. Even better, employers pay the premiums for this protection, plus there is no tax to pay on this 'benefit in kind'.
7. Medical insurance and other protection
Lastly, your company may offer its employees free or discounted private medical insurance (PMI). Over six million Brits have this protection, with BUPA the clear market leader. This insurance enables patients to avoid NHS waiting lists by getting prompt treatment at private hospitals.
As a freelancer, I don't have medical insurance, but I am covered by my wife's corporate policy. Hence, I was able to have spinal surgery last December in a local hospital which offered the highest standard of care, as well as a private room and decent meals.
Getting PMI through your employer is cheaper and less tricky than buying your own policy, so do join your company scheme if you think it's worth your while. The same goes for dental insurance and income protection (cover for long-term sickness and disability) -- if available, get these via your employer.
In summary, good employers offer a wide range of valuable benefits to their personnel, so dig around to see what you can grab. Also, when looking for a new job, look at the total package and not just the basic salary. Otherwise, work won't be worth hardly as much...
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