The Highest Beings in C-suite have asked Big Bad Boss to look at making their benefits more tax effective. Sigh. I guess in these uncertain times, even those on seven-figure packages are feeling the pinch. We have been through all this before. Despite what you hear on social media, there is little that high earners can do to avoid paying tax on earnings. They can get creative with savings with their post-tax earnings but, come what may, what they get from employment is subject to tax. In fact, all you can really do is defer paying it, through longer-term incentives and indirectly by salary sacrifice into pension schemes. However, at the senior level they are already getting long-term incentives and have a reduced annual allowance for pension contributions. Poor things.
Just in case, Big Bad Boss checks in with Smarmy Consulting to see if there are any funky new ways to save tax, but no, just as I said, what little there is, we have got it covered. So how do we address the shouts from upstairs? I cannot magic tax away, and we are not about to start any dodgy avoidance shenanigans. No, any solution has to be above board.
Top-level benefits
If you look at the typical benefits at this level, we tick all the boxes. Long-term equity? Check. Long-term cash incentive. Check. Deferred bonus scheme. Check. Car allowance big enough to buy top-of-the-line outsize e-vehicle. Check. Enhanced medical insurance plan. Extra this. Extra that. The list goes on. Right at the end of the list financial planning. Yes, that is right, we pay them extra to see an adviser to make the most of it all. That gives me an idea. I contact the provider and yes, it can offer a super duper extra advanced financial planning service to help extra special people maximise their wealth even further. That sounds like just what we need.
I put together a summary of the benefits for Big Bad Boss to get approval on the extra cost. I also suggest we could sweeten them further with a little cash top up to help relieve some of the burden. It will not be considered a gross up, you understand, we have a very firm policy not to equalise any tax change. No, it will be just a little bit of extra cash for the financial planners to maximise. The total increase to budget for just a few people is eye-watering, but clearly, they are worth it because it gets signed off in record time.
It might sound like I am jealous, but I am really not. In this job, it is all just numbers and there will always be someone paid more, and many more are paid less. My manager in a previous role would get all worked up because the managing director in Switzerland was paid more than her. I really think she was in the wrong career; firstly for not being able to handle hearing about big salaries, and secondly for not understanding the difference in international markets.
I really would not want a job in our leadership team for all the money; it is just too dog-eat-dog and stressful. In some ways they earn every penny. I guess I am just a bit cross about their self-seeking behaviour. I mean, no-one is worrying about maximising wealth of the rest of the employees. Far from it. In fact, when I stop to think about it, most of the instructions we get to review or change benefits are driven by the personal needs of our leadership team.
Unfair beneft budget?
This whole tax whinge from upstairs has got me thinking. With the buffer in the budget used up by the higher beings, I cannot offer any new benefits to the workforce as a whole. Times are uncertain, and the cost of living will be affecting all of our employees. I know that the lower you are paid, the less resilience to financial change you have. What we do need to do is make the most of what we have. I decide to develop a little off-cycle communication on just that.
There are a lot of things we have already that people might forget to use. We have a financial education programme for a start. It is basic, unlike the custom advice we give our leaders, but it might just help some of our employees get to grips with the family budget or debt. We have an employee assistance programme too, if people need extra support across many subject areas. I suspect it is a bit of lip service to assistance, but it is there to be used. I make a mental note to test it on some of my own worries. Partly because I could do with a listening ear, and also because it is good to test the service from time to time.
I also remind employees about the salary sacrifice arrangement which allows them to put a bit more away for retirement or towards other benefits, saving both the employee and the organisation some tax, at least until 2029. As we are coming up to bonus time, I also remind them they can salary sacrifice their bonus into the pension plan saving tax on that too, although I suspect anyone at the lower end of salaries will be more concerned about taking extra cash than saving tax.
AI helps me write the words, and Big Bad Boss and internal comms will no doubt do a final review, so it is really no effort for me at all. However, let’s not forget it was my idea to put something extra out. It almost looks like I care.
