Class 1: Vouchers - non-cash vouchers - calculation of the amount of earnings - the chargeable expense - examples
NIM02466 explains how to calculate the amount of earnings included in any paymentmade by way of a non-cash voucher (see
NIM02413). The followingexamples illustrate that calculation.
An employer buys a batch of non-cash vouchers exchangeable at a High Street store. Eachvoucher has a face value of £50.
Because the employer bought in bulk, it negotiated a discount on the price. So the costof each voucher to it ie, the chargeable expense, is £35 a voucher.
This is the amount to be included in the employees earnings for each voucher theyreceive.
Using the last example, the employee is required to pay their employer 50% of thechargeable expense for each non-cash voucher they receive.
So the chargeable expense of each voucher provided to the employee is reduced by £17.50.So the amount of earnings is £17.50 for each voucher provided to the employee.
Where the non-cash voucher is a meal voucher that can be exchanged only for a meal costingmore than 15 pence, see NIM02468.