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HMRC internal manual

National Insurance Manual

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.

Example 1

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 employee’s earnings for each voucher theyreceive.

Example 2

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.