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HMRC internal manual

# Class 1: Vouchers - non-cash vouchers - calculation of the amount of earnings - the chargeable expense - voucher provided for two or more employees - examples

NIM02464 explains how to calculate the amount of earnings where a non-cash voucher (see NIM02413) is provided to two or more employees. The following examples illustrate that calculation.

Example 1

Three employees, A, B and C, are each entitled to a Xmas bonus. A is entitled to £750, B £500 and C £250.

Instead of paying the bonuses in cash, the employer gives them jointly a non-cash voucher with a face value of £1,500. The voucher can only be exchanged for goods at a local electrical retailer.

In obtaining the voucher the employer was able to get a small discount. But its overall cost was still £1,500.

The amount of the chargeable expense (see NIM02461) is £1,500. As the respective proportion of the benefit of the voucher for each employee is known at the time of payment, the amount of earnings is as follows:

• A - £750
• B - £500
• C - £250.

Example 2

An employer decides to reward four employees by giving them a record token with a face value of £120. The cost (ie, the chargeable expense - see NIM02461) of the token to the employer was £100.

As the respective proportion of the benefit of the voucher for each employee is not known at the time of payment, the amount of earnings for each employee is calculated as follows:

chargeable expense divided by the number of employees equals the amount of earnings for each employee.

That is, £100 divided by 4 = £25 for each employee.