If someone is interested in getting part of his or her salaries in form of kind instead of cash then salary sacrifice is the best way for it. Therefore the first thing to understand is the concept of salary sacrifice and what it contains. For someone desirous of getting part of his or her salaries in kind instead of cash, salary sacrifice could be the ideal process. The process is especially beneficial for the owner because there is no requirement for paying tax on it personally. Since the part of the salary that is sacrificed is converted into some kind that would be equal to the value of the sacrificed salary. Tax Benefits of Salary Sacrifice Big tax benefits can be incurred by resorting to salary sacrifice. For instance; when a part of the salary is converted into kind, the income tax is reduced as it is calculated only on the cash party of the salary. Since that part is reduced, there is consequential reduction in taxes as well. Salary Sacrifice Options There are numerous options for the employee in sacrificing his or her salary. He or she can opt for something like a car. Sharing of payments for regular expenses could be an option. Schools fees payments or obtaining childcare vouchers could also be an option for the employee concerned. In lieu of a part of the salary the employer may take up the responsibility of paying the utility bills of the employee. Restrictions could be few and it will largely depend on the mutual understanding of employer and employee. A Reciprocal process In essence; the process of sacrificing salary by an employee should be mutually agreed between the employee and the employer. Before agreeing to the processes for which the employee is desirous of sacrificing salary and getting the tasks carried out, the employer may consider various factors. Also it is necessary finding out whether tax benefits are available for all of the alternative arrangements for salaries made. For instance; investments on childcare vouchers would be good since it comes within the purview of fringe benefit taxes. Instead of the employee it would be the employer that will be paying the FBT in such cases. Going by the current law of the land the fringe benefit taxes or FBT is available on cars, properties both movable and immovable, and expense payments including child care and home phone costs. Sacrificing salary in lieu of either of these will be to the best benefit of the investor. You can find out more on salary sacrifice http://www.faircare.co.uk/.
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