Benefits in the United Kingdom

All employers in the UK have to provide a pension scheme to employees, which comes on top of the state pension, within three months of commencement of work on an ‘automatic enrolment’ basis. While the employers cannot opt out of providing it, employees can decide whether they want to join it or not.

The only cases where an employer doesn’t need to enrol employees in a pension scheme are:

• The employee is already enrolled in a program that meets the automatic enrollment rules arranged by the employer
• The employee opted out of the pension set by the employer more than 12 months before the staging date
• The employee is from another EU member state and is in an EU cross-border pension scheme.

After the employee has been enrolled into the workplace pension scheme, the employer must notify the employee about the date it commenced, the type of pension, which the provider is, and how to leave the scheme if they decide to do so. Also, the employer should inform the employee how much they are contributing to the pension, how much the employee needs to participate, and how tax relief applies to them.

Since April 2019, employers’ minimum contribution is 3%, employees’ is 4%, and government tax relief is 1% for a total minimum contribution of 8%.

As employees change jobs, they can join a different workplace pension scheme, carry on making contributions to their old existing plan, or combine the old and new pension schemes.

Employers must automatically re-enrol an employee in the scheme every 3 years if they have previously left it. To do this, employers need to send a written statement to the employee informing them of that. After an employee has been re-enrolled, they can leave again.

All employees in the UK can request flexible working from their first day in a job. Flexible working includes job sharing, working from home, part-time, flex time and compressed hours, staggered hours and annualized hours.

Employers must decide within three months and handle the request in a reasonable manner, such as assessing the advantages and disadvantages, holding a meeting to discuss it or offering an appeal process. An employer can refuse the request if they have a good business reason to do so.

This government initiative allows employers to sign up to a provider that offers employees an opportunity to get bikes and accessories tax-free.

Healthcare insurance is a common benefit. Companies provide healthcare insurance to their employees (paid 70%- 100% by the employer). Employees are sometimes permitted to include their immediate family in these schemes depending on eligibility requirements.

Dental & Vision plans are also common benefits, paid 70%-100% by the company.

Companies can provide £26 a month tax-free for their employees working from home. This is on top of any home office equipment allowance, which is also tax-free.

Note: the employee cannot claim tax relief if they choose to work from home other than during COVID-19.

Most companies provide more comprehensive coverage of sickness payment through sickness & disability (directly or through the income protection insurance):

• Company sick pay from day one until week 10: paid 80%-100% of base salary less statutory sick pay (SSP). The employer’s contribution to the group pension plan is continued for Group Life Insurance.
• Company sick pay from week 11 until week 26: paid 50% -70% of salary less SSP. The employer’s contribution to the group pension plan is continued.
• From week 27: paid 40%-60% of salary less SSP. The employer’s contribution to the group pension plan is continued for mandatory contribution.

It is common for companies to contribute more than the statutory minimum level into pension funds. There are several types of workplace pension schemes such as defined benefit and defined contribution schemes. Employers can choose which is more suitable for their case.

Companies commonly provide life insurance coverage. Standard coverage is £500,000.

Employees have the statutory right to 2 weeks of paternity leave with statutory pay of £184.03 or 90% of average weekly wage (whichever is lower). However, most companies choose to provide employees with full payment during the leave.

Employers can provide employees with an interest-free loan of up to £10,000 in any tax year.

Reimbursements can be claimed for fuel costs for business travel through expense reporting (excl home/work distance). Reimbursement for the first 10,000 business miles (in the tax year) is 45p/mile and 25p/mile thereafter.

In some companies, a gym membership is provided as an employee benefit.

Many companies offer a counselling service or Employment Assistance Programmes (EAP) as a core benefit to all employees.

Some companies offer all staff extra holidays for long service.

Pays a percentage of an employee’s monthly income (usually 60-80%) as regular income if they become physically unable to work. It is paid once Statutory Sick Pay ends, usually, one to six months after the employee falls ill.