New flexibility afforded to employees in allowing them to buy or sell holiday has led to Holiday Trading becoming a highly valued benefit. Employees may be planning a special trip and would like more days off, or they may wish to increase their take home pay, in which case they can sell some of their allocation.
The number of days that can be bought or sold is predetermined by the employer. If employees buy extra days, the salary adjustment takes the form of a salary sacrifice, with resultant tax and NI savings for both employer and employee. If employees sell days, the value of the days is added to their gross salary, and tax and NI is payable in the usual way. Holiday days are normally valued at 1/260th of gross basic salary.
Fair Care can advise you of the best way to offer this benefit and can provide a fully- outsourced solution for the management and administration of the scheme.
Why run a holiday trading scheme?
- Incentivise employees by offering flexible holiday time
- Allow employees to trade salary for additional holiday time
- Our team is a fully-sourced solution for management of the scheme
Benefits to organisations
- Holidays contribute positively to mental health, happier employees work harder
- The cost for buying holiday is taken from the employee's gross salary, so you will save on tax and National Insurance
Benefits to employees
- Gain choice and control over the work/life balance
- Extra holiday time may improve mental health
- Potentially less strain and stress when planning travel
- Sacrifice salary for more holiday days