is the latest topic to be sweeping through the industry, so here is an easy to understand overview of what it is and how it works with a cashless system.Flexible Benefits – What is it?
Flexible benefits are when an employee takes a formal reduction to their cash salary in exchange for a non cash benefit. The employee’s terms and conditions must be amended if participating in such a scheme.
This is an agreement between the employee and the employer; however, the scheme can result in a Tax or National Insurance saving, therefore all schemes must be carefully considered and approved by your local tax compliance officer.
So for more information on what considerations should be taken into account and advice on how to set up a scheme go to http://www.hmrc.gov.uk/
.How do UMIS and IUMIS manage Flexible Benefits?
Your UMIS or IUMIS solution will interface with your payroll system. Each month the payroll system will create a CSV file which is automatically collected by UMIS/IUMIS. Once the data has been transferred to UMIS/IUMIS all relevant cards are then loaded with the set amount according to the rules of your scheme. This is done immediately and does not require the card to be inserted into a loading station to download funds.
The funds are stored in a separate purse which cannot be added to by the employee or refunded. An additional purse will be accessible on the card should an employee wish to top up their card each month with extra funds.At the Point of Sale and vending machines
When an employee goes to the point of sale or vending machine, the system will automatically look at the Flexible Benefits purse first to take payment. If there is not sufficient funds to complete the transaction it will then look to the second purse.Restrictions
Due to tax laws some items cannot be purchased under the salary sacrifice scheme, i.e. throat lozenges. These items will be programmed into the software to look to the second purse for payment when presented at the point of sale.Checking balance
Balances of both purses can be checked at the point of sale, loaders and Upay.
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