First things first, you see it at the office parking lot. An employee shows up in a brand-new, clean, and quiet car. They mention it was arranged by the employer. Not a bonus. Not a company car from years ago. Something somewhere in between the paycheck, the taxes, and the daily commute.
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To both employers and employees alike, workplace benefits have evolved into being much more than just the usual suspects: pension, health insurance, vacation time, etc. These days, people are concerned with all of these things plus the regular monthly expenses (the ones that suck money out of their household budgets). Transportation is among them.
How Your Driveway Became Part Of Your Workplace Benefits Package
An automobile is not merely an item based on a person’s preference for how they choose to travel. For most employees, it is how they go to work, transport children to and from schools, visit customers, and maintain the various aspects of their families’ lives. When the costs associated with an automobile increase, it does not remain in some sort of vacuum outside of the place of employment. It will likely create financial stress for an employee, alter their expectations regarding salary, and determine whether the job they hold is economically viable.
This is precisely where salary sacrifice for cars could be a great advantage for an employee. Rather than treating transportation as a private concern, the employer creates a formal agreement that may allow an employee to acquire a new car in a manner that is somewhat more feasible via payroll.
It is practical. This is why it works. You are providing tangible assistance to help an employee address an expense that each employee has been paying each month for a long time.
The Value Lies Within The Structure
The appeal of this type of benefit is not merely the automobile itself. The appeal lies in how it fits within existing corporate infrastructure. The payroll department will handle the deductions, the tax implications will be determined when creating the arrangement, and the employee will receive clarity prior to making a commitment as to what they will actually be taking home.
As such, this provides businesses with a clearer method of structuring their benefits. Businesses will no longer simply be providing their employees additional compensation in hopes that it addresses their issues. Employers will provide employees with options that support employees’ ability to afford transportation, assist with budgeting and perhaps more importantly, facilitate employees’ access to newer or lower emissions vehicles.
However, there is certainly a need for clear communication relative to this type of benefit. Employees should understand the potential effect on net income due to salary sacrifices and contract terms relative to insurance requirements and mileage limitations. If an employee leaves the company, they should understand what will happen relative to the benefit provided. As such, a good benefit is essentially worthless if the fine print is unclear.
Ordinary Life – A Common Theme Among Good Employee Benefits
Good employee benefits generally speak directly to everyday life. Not annually. Not only in times of crisis. Each Monday morning. Each commute. Each quiet ride home from that long meeting.
When considering employee benefits from this perspective, the driveway begins to lose its status as a personal space and instead begins to resemble a portion of the broader employee experience. That is where the opportunities exist: practical. Calm. Relatively close to payroll.
