Salary Sacrifice Travel Benefit Questions and Answers

 Salary Sacrifice Travel Benefit Questions and Answers Please find below some questions and answers that you may find helpful to further understand the detail behind this fantastic non-­‐cash benefit plan. SSTB can be used in conjunction with the employee concession policy to ‘top-­‐up’ your concession entitlement. Click here to go to the employee concessions policy. About the Salary Sacrifice Travel Benefit (SSTB) What is the Salary Sacrifice Travel Benefit? Salary Sacrifice is a way in which you can elect to sacrifice a fixed amount of your gross salary in exchange for entitlement to an additional non-­‐cash holiday benefit, known as the “Salary Sacrifice Travel Benefit” (SSTB). What’s the benefit for me as an employee? This benefit gives you another opportunity to have a greater influence over your benefits package as part of Mychoice. If you chose to participate in the scheme, as reductions are made to your monthly gross salary, you save tax & NI – combining this with your Travel Concessions gives you even greater opportunities to see the world. How does it work? Put simply, employees can enrol in the SSTB via Self Service, to elect to have their gross salary reduced for a period of either 3, 6, 9 or 12 months. Salary reductions can be made between a minimum of £25 and a maximum of £250 per month. Once enrolled, Thomas Cook will provide you with a Salary Sacrifice Travel Benefit to the equivalent value which can be used in conjunction with your Employee Travel Concessions & standard 15% employee discount – in accordance with the policy. Please note that as per policy and in adherence to HMRC rules, the minimum contribution values applicable to employee bookings (i.e. 30% on TC Main Brand, 75% in TCS Scheduled) must first be paid by the employee prior to the allocation of any SSTB or concessionary element. This means that deposits cannot be paid using SSTB. What’s more, the full value of your selected annual SSTB can be applied to a booking as soon as you have enrolled and had the first reduction from payroll (usually April). The entitlement to SSTB is conditional upon you remaining in employment with Thomas Cook until the end of the agreed period of salary reductions. Should you leave before the end of this period, the SSTB will be pro-­‐rated appropriately based on the number of months worked in the scheme year to your leave date. How much does it reduce the cost of my holiday by? Example -­‐ Booking a Charter holiday worth £3,500: -­‐
If you elect to ‘sacrifice’ £100 of your salary in exchange for SSTB your total annual SSTB = £1,200 -­‐
Tax and NI reduced by £384 (£1,200 x 32%) for a basic rate, £504 (£1,200 x 42%) for a higher rate and £564 (£1,200 x 47%) for additional rate taxpayer To apply against your Charter holiday worth £3,500: 1) make the minimum payment of £1,050 (30% of total holiday cost) 2) apply your Employee Concession £1,250* 3) apply your SSTB of £1,200 4) Pay any remaining balance (0 balance in this scenario) If you add your tax and NI reduction to your Concession the cost to you of your £3,500 holiday is reduced to £1,866 for a basic rate, £1,746 for a higher rate and £1,686 for additional rate taxpayer* * Subject to the minimum payment required and your Concession entitlement -­‐ maximum concession of £1,250 applied in this example What products can I use SSTB in conjunction with? SSTB may only be used in line with the published TC Concession rules (available on HR Online, Employee Concessions Policy). Therefore, when booking an in-­‐house charter holiday, the 30% minimum payable has to be calculated prior to, the application of TC Concessions or SSTB, and likewise for Scheduled Package etc. You may apply SSTB to the in-­‐house brands as listed in the policy. You are not able to use SSTB on any product not specified in the policy. How can I participate in the scheme? Employees must be on TC UK SAP Payroll. Those employees on Zero Hours contracts, working their notice through resignation or redundancy or who’s participation would place them below National Minimum Wage requirements may not participate. Any employee joining the scheme who does not meet the criteria above, will be removed from the scheme before reductions commence. How do I apply? Enrolment in to SSTB is completed annually – through Mychoice Flexible Benefits, so you should ensure that any selections you make are appropriate for the year. By enrolling in the scheme, you are agreeing to a change in your terms and conditions of employment – as you agree to sacrifice salary in exchange for the travel benefit. I’ve signed up, how soon do I have to use my SSTB? We encourage employees to use their SSTB in conjunction with the concession year April to March. We recognise that this won’t always be possible though, therefore, employees must ensure that by the end of the concession year (31 March), any SSTB you have elected to receive that has not been used, is applied to a confirmed booking – even though it may travel within the next 12 months i.e. a booking made to travel in May 2016, may have SSTB from April 2015 – March 2016 applied st
to it, as long as this is applied by 31 March 2016. Employees should ensure that they use the latest version of the Employee Concessions Booking Form, available on HR Online. Once I’ve enrolled, can I change my mind? Once you have enrolled in SSTB, and accepted the change to your terms and conditions of employment, it is not possible to amend or stop your participation during the period you have enrolled for, so please consider carefully the value you decide to sacrifice carefully before you complete your enrolment. Does participating in SSTB affect any other benefits? You will continue to be able to participate in your non-­‐contractual annual TC Concession scheme, regardless of whether or not you participate in the SSTB. Participation in salary sacrifice does not affect the calculation of pension, bonus or salary related benefits, as these are calculated on your Reference Salary (i.e. your gross salary prior to any salary sacrifice reductions). You should be aware though, that participation in Salary Sacrifice schemes, may affect the calculation of Maternity pay and you are advised to review the Maternity Policy in this respect. I have a holiday already booked, can I enrol for SSTB and apply it to my existing booking? This is fine, this can be completed as soon as the first monthly salary reduction has happened. Where bookings have already had the full balance paid (i.e. within 12 weeks of travel) or have already travelled, SSTB may not be applied. Other Questions In order to use SSTB, do I also have to use my TC Concessions? No – you need to ensure that you are complying with the brand requirements as detailed in the published policy, however, SSTB may be applied to bookings with a 15% discount (for example). If I leave the business in the future, and I am participating in the SSTB scheme – what happens when I leave? As stated above, the entitlement to SSTB is conditional upon you remaining in employment with Thomas Cook until the end of the agreed period of salary reductions. Should you leave within the scheme year, the SSTB will be pro-­‐rated appropriately, based on the number of months worked in the scheme year to your leave date. If you leave Thomas Cook through resignation (or other dismissal), any unused entitlement equivalent to the total value of SSTB reductions made at the point of leaving, will be calculated and may be applied to a holiday booking departing within 3 months of your leaving date. If you have already applied your SSTB to a booking, where the value applied is greater than the total value sacrificed at the point of leaving, any outstanding amount will be taken from your final salary. No cash payment will be offered as an alternative. If you leave Thomas Cook by reason of redundancy, you may either apply any unused SSTB to a booking departing within 6 months of your leave date – or you may be offered a compensation payment equal to the total value of any unused SSTB (less any tax & NI deductions) that has not been applied to a booking at the Company’s discretion. Details will be confirmed during your consultation period. All leavers who have applied SSTB to a booking, who leave before the end of the agreed salary reduction period, will be charged a fee equal to the difference in value of the total agreed reduction less the used SSTB. This will be deducted from your final net salary. To the extent your final net salary is not sufficient to cover the fee / difference you will be required to make a payment to TC via cheque or [other] within 14 days of leaving. Please note, employees working their notice are not permitted to join the scheme. How will Staff Travel know that I have enrolled in SSTB? Once enrolment is completed each year – we will notify the Staff Travel team of your selection so that they are able to apply as your request. Please note, it is key that the updated booking form is used with immediate effect to ensure any SSTB can be applied accurately. The booking form is available on HR Online, in the Employee Concessions policy. I have other questions not covered here – what should I do? Please refer to the documents being made available on HR Online – and also in the Employee Travel Concession Policy.