UK 
United States
If you’re under pressure to reduce budgets from your colleagues in finance then you’re not alone. Organisations across the board are looking at ways to save money to cover the ever-increasing rise in operational expenditure.
Although it might be an easy place to start, your staff rewards packages don’t have to suffer the consequences of shrinking budgets. In fact, some staff benefits actually create meaningful savings particularly those utilising the salary sacrifice mechanism.
How does salary sacrifice work?
Salary sacrifice is an agreement whereby an employee agrees to give up part of their cash renumeration package in exchange for a non-cash benefit of the same value for a defined period. This reduces their taxable income making them savings equivalent to their personal tax band (28%, 42% or 47%).
As a result, the organisation’s gross salary bill is reduced thereby decreasing the amount subject to Employer’s National Insurance Contributions (and possibly employer pension contributions) thus saving employers 15% on the cost of the non-cash benefit.
The savings made possible through salary sacrifice is only part of the story - the employee gets to reimburse the employer through manageable monthly reductions of their salary (interest-fee).
There are only a few benefits that use the salary sacrifice mechanism and one of them is the Cycle to Work Scheme. Through this government backed scheme, the employer buys a voucher which the employee uses to get a bike of their choice from their chosen retailer. Both the employee and employer make savings on the value of the voucher through reduced taxation. This makes what might be a considerable investment by the employee much more attainable and acceptable to their household budget.
On an average purchase of a £2,000 bike, employees save at least £560 (28%) with employers saving £300 (15%). Multiply that across tens, or hundreds of employees and that’s a healthy budget saving for your department.
And the benefits of using the Cycle to Work Scheme don’t end there. The health and wellbeing benefits from a more active lifestyle are well documented. Reduction in sickness absence and increase in productivity are just some of areas you can expect to see improvement. And don’t forget the reduced emissions in your Scope 3 reporting for your carbon reduction plans.
Green Commute Initiative
It’s important to appoint the right Cycle to Work Scheme partner as not all offerings are the same. Green Commute Initiative (GCI) is an innovative and award-winning provider of the scheme. They are the most trusted scheme provider (4.9 Trustpilot score) and they focus on delivering a top-class customer journey. Key features of GCI:
Employees save between 28 – 47% (depending on their tax band)
There are no ownership fees – just maximum savings
Free access to the scheme for both employer and employee
No spend limits imposed by GCI
Flexible payment periods from 3 to 60 months
Employer saves 15% in reduced NICs
Light-touch scheme admin for the employer
Free membership of the GCI community of LovetoRide.net
Access to special offers from two bike insurance providers
As HR budgets become under threat, protect your rewards package by taking advantage of salary sacrifice schemes such as the Cycle to Work Scheme - it’s a smart, proactive way for you to offer your staff an effective and sustainable benefit. Green Commute Initiative is a not-for-profit social enterprise with the sole aim of getting more people to cycle on their commute to work. When more people cycle, everyone wins.
