08 December 2011

Tax Efficient Perks You Must Ask Your Employer For

For employees the benefits go beyond salaries to include lifestyle perks such as company accommodation or club membership. But here we are not talking about lifestyle perk but certain useful benefits you should receive as an employee. Because time has changed, people don’t spend their entire career in just one company retiring with full pension and benefits for life. Infact by the time you reach the age of 50 you would have changed atleast 5 employers. So take an advantage of this, your employer will definitely not want to lose you if your skills are marketable.


Here is a list of things you can try asking your employer for, either at the negotiation table before you take a new job, or at an annual review when you have demonstrated that you are an excellent employee.


Raise



Everyone asks for a raise. And they would have tried doing this atleast once in their career period. The higher your income, the more tax you pay, and at times it is a small raise to the next tax bracket that means less take-home pay than before. But on the other hand your employer reduces your salary for specific benefits like pension contributions, gym membership. It is only the basic-rate taxpayers will benefit from having access to extras which otherwise is afford, while higher-rate taxpayers can cut a chunk off their income tax bill.









Pay for Education



Your employer should be willing to fund his employees who are seeking further knowledge in their profession. Education can take the form of on-line courses, part-time university or college credits, or professional courses. You can talk to your HR about the direct benefits of employer-funded education. These include increased loyalty, reduced employee turnover, increased productivity, ability to take on new projects and the opportunity to show leadership skills. So you may end up getting that raise after they pay for your education anyway. The benefit you receive on opting doing so is the cost of the course is deductible to your employer, and it rarely shows up on your pay stub as a taxable benefit.



Car Allowance



If the company is providing their employees with car allowance, it comes in a form of an additional pay. But mostly comes in form of a credit card or reimbursement plan. If so then it allows you to avoid additional taxation as it’s considered a company expense. If you are the one paying then consider a more fuel-efficient vehicle that will reduce the tax you pay.  Or in the case where the employer provides you with a car lease option, you should consider availing of the same as it would be a tax efficient option.











Ask your employer for a better employer-funded coverage of your retirement. A qualified plan can help you keep more of what you earn. Tax-deductible qualified plans provide retirement benefits for the business owner and employees and through life insurance can provide death benefits.