Payroll Scenario for GB FlexBens Holiday Plan
Selling AnnualHoliday
A female employee’s basic monthly salary is GBP 5,000 and her standard holiday entitlement is 25 days per year. She enrols in a Holiday Buying/Selling Plan and sells five days annual holiday.
Contract Basic Salary
|
Standard Option |
Standard Option Cost |
Flexed Option |
Flexed Option Cost |
Difference (Standard – Flex Cost) |
NI Neutrality Amount |
Employee Cost: Credit + / Deduction |
|---|---|---|---|---|---|---|---|
5,000 |
25 days |
480.77 |
20 days |
384.62 |
96.15 |
– 10.92 |
85.23 |
Contract Basic Salary |
5,000.00 |
|---|---|
Value of Holiday Sell |
+96.15 |
|
5,096.15 |
NI Neutrality Amount |
–10.92 |
|
5,085.23 |
The employee receives a gross salary of GBP 5,085.23: her taxable and NIable pay. The National Insurance Cost Neutrality amount is 10.92, which is deducted from the salary. This is because through selling holiday, the employee’s taxable and NIable pay increases, as do Employer National Insurance Contributions (NICs) as a direct result.
Buying AnnualHoliday
A female employee’s basic monthly salary is GBP 5,000 and her standard holiday entitlement is 25 days per year. She enrols in a Holiday Buying/Selling Plan and buys five days annual holiday.
Contract Basic Salary |
Standard Option |
Standard Option Cost |
Flexed Option |
Flexed Option Cost |
Difference (Standard – Flex Cost) |
NI Neutrality Amount |
Employee Cost: Credit + / Deduction |
|---|---|---|---|---|---|---|---|
5,000 |
25 days |
480.77 |
30 days |
576.92 |
– 96.15 |
10.92 |
– 85.23 |
Contract Basic Salary |
5,000.00 |
|---|---|
Value of Holiday Buy |
– 96.15 |
|
4,903.85 |
NI Neutrality Amount |
+10.92 |
|
4,914.77 |
The employee receives a gross salary of GBP 4,914.77: her taxable and NIable pay. The National Insurance Cost Neutrality amount is 10.92, which is added to the salary. This is because through buying holiday, the employee’s taxable and NIable pay is reduced, as are Employer NICs as a direct result.