Incentive award schemes and tax
06 Mar, 2019
Companies can use incentive award schemes to encourage their employees in various ways, for example, to sell more of their own goods and services. The award can take various forms including cash, vouchers or other gifts.
Where an employer meets the tax payable on a non-cash incentive award given to a direct employee by entering into a PAYE settlement agreement (PSA), the award is not chargeable to tax on the employee.
With the exception of non-cash awards covered by a PSA, incentive awards made to employees are chargeable as employment income.