Techscheme: The Employer’s Complete Guide

How Does Techscheme Work?

Techscheme works in the same way as other salary sacrifices such as Cycle To Work and electric car schemes. There’s no obligation for your business to take part. But if you do, you’ll front the money to buy an employee’s purchase, and the employee then pays you back over 12 months through salary sacrifice.

These payments come out of their gross salary before PAYE and National Insurance, meaning the employee pays less tax, and your business saves on National Insurance contributions.

In a nutshell, the employee submits a request, you as the employer approves it, Techscheme then actions the request, and then the employee is ready for their shopping spree. We’ll explain in more detail how the whole process works in the following sections.

Is Your Business Eligible For Techscheme?

To be eligible for Techscheme, your business should meet the following criteria:

• You pay your workforce through the Pay-As-You-Earn (PAYE) system
• You have the authority to enter into a legal agreement on behalf of your business or organisation
• You’re capable of covering the upfront costs of your employees’ products.

What Are The Benefits Of Techscheme?

Techscheme is a great benefit to offer your employees, and there are benefits for your business, too:

Benefits For Employers

Cost-Neutral

As explained, it won’t cost you a penny to join the scheme. It’s free to register, and even though you cover the cost of the initial purchase, you’ll get that money back through your employees’ salary sacrifice after 12 months. You’ll also save on your National Insurance contributions.

Aids Staff Retention

60% of employees said access to Techscheme makes them feel more loyal to their employer. And while it shouldn’t be relied on as the sole way to retain your team, the fact that an employee would forgo any tax benefits should they leave your business (while their payment plan is running) will help to reduce staff churn.

It can cost around 30-40% of a leaver’s salary to hire a new employee. With this in mind, it’s important to consider how an employee benefits package can help retain staff.

Nadeem Farid
Head of Employee Benefits

Benefits For Employees

Supports Financial Wellbeing

Techscheme offers a responsible and affordable way for employees to get the tech they need. They’ll never miss a repayment because it’s taken straight from their salary, and it’s better than buying on finance as there’s no interest fees or credit check required.

National Insurance Savings

Paying for goods through Techscheme also means employees will save on the cost. This is because, as a result of salary sacrifice, they will pay less National Insurance. To give you an idea of how much employees can save, we’ve provided example savings below.

Based on the above, rather than having to pay £1,000 upfront for a new bike, employees can spread the cost over 12 months (£75 a month) via salary sacrifice and save £100 as a result of NI savings.

Supports Every Aspect Of Employees’ Lives

It’s not just gadgets for work; employees can use Techsheme to buy the latest products to enjoy in their spare time. So whether they want to unwind with a new Xbox or replace their tired fridge/freezer, you’re helping employees to bring their “best selves” to work by supporting their happiness and comfort at home.

Supports Digital Inclusion

Everything’s online these days, but a portion of the UK population is still excluded from the digital world – whether that’s through connectivity, skills, or affordability. That’s why the UK government introduced the Digital Skills and Inclusion initiative. By providing Techscheme through your business, you’re actively helping to boost employees’ digital skills in a financially savvy way, getting more people connected to the online world.

How Much Does It Cost To Offer Techscheme To Your Employees?

Apart from the upfront cost of purchasing the products for your employees, Techscheme is a cost-neutral benefit that you can start offering to your workforce.

And as repayments are made to you through salary sacrifice, you save on National Insurance contributions, too. However, if you use a benefits provider, they may charge an implementation and management fee to maintain the benefit on your behalf.

How Is It Taxed?

Since salary sacrifice comes from gross salary (before tax), participants won’t initially pay tax or National Insurance on that amount. However, providing equipment is a taxable Benefit In Kind (BIK) that needs reporting to HMRC on a P11D form at the tax year’s end.

HMRC recovers the tax owed in arrears, adjusting the employee’s tax code the following tax year. Despite this, employees still enjoy NIC savings, up to 8% for basic rate taxpayers and 2% for higher rate taxpayers.

Techscheme can help your workforce save money and spread the cost on the hardware they need. There’s no cost to the employer and it’s quick to implement.

Richard Noble
Senior Employee Benefits Consultant

How To Set Up Techscheme For Your Employees

Want to set up a Techscheme for your business? Here’s how the entire process works:

Step 1: Sign Up

Kick things off by getting your employee benefits broker to register you as a Techscheme employer. After your registration is done, you’ll be given a unique link which is personalised for you as an employer. Your staff can then use this to apply for the scheme.

Step 2: Promote To Employees

Time to tell your employees about their new perk! Send out company-wide messages and schedule regular reminders. Techscheme offers free marketing materials to help you communicate the benefits of taking part, so make use of them.

Step 3: Process Employee Applications

When an employee makes an application, you’ll be alerted to review and approve their request. Ensure they meet eligibility criteria, and that their salary doesn’t drop below the National Minimum Wage after the salary sacrifice.

Step 4: Pay The Invoice

Once approved, you’ll be issued an invoice for the request. Pay this promptly, because your employees will be buzzing to get their new goodies!

Step 5: Redemption Code Issued

After payment, employees will receive a redemption code. They can then proceed to get lost in the labyrinth of IKEA aisles, or grab the latest tech from the shelves in Currys.

Step 6: Payroll Setup For Salary Sacrifice

Next, the salary sacrifice needs to be set up on your payroll. Techscheme should issue any info needed to ensure this goes seamlessly.

Step 7: Enjoy

At this point, your obligations as an employer are complete. The employee receives their new products and starts repaying the costs through deductions from their salary. After 12 months, you’ll have recouped your initial costs and saved on your National Insurance contributions.

If this sounds like a lot of admin, well… that’s because it is. But that shouldn’t get in the way of you providing a valuable benefit like Techscheme. And you can make it even easier by working with us at Drewberry™.

The Drewberry team can set up the entire scheme on your behalf, while you manage it (along with all your other benefits) directly using our clever portal, My.Drewberry.

Employees can also access and take control of their perks, reducing paperwork and leaving more time to focus on what matters. Give us a call on 02074425880 or email help@drewberry.co.uk to get started.

Nadeem Farid
Head of Health & Wellbeing Benefits

How To Promote And Communicate Techscheme To Your Employees

Who doesn’t love an IKEA haul? Or eyeing up the latest gadgets in Currys? So don’t keep Techscheme a secret. Here’s how to spread the word:

• Post on your company chat, intranet, or benefits platform, explaining the scheme and providing instructions on how to join. Make sure it’s easy to find
• Place posters in visible spots around your workplace to catch everyone’s attention
• If you send out internal newsletters, regularly mention the scheme and provide links to more information on your intranet
• Techscheme offers free marketing support, such as digital and print materials like posters, graphics, logos, and email text. Make use of them!
• Mention Techscheme in your recruitment ads. It showcases your commitment to your employees and makes buying higher-cost items more affordable.

You need to have a well-planned communication strategy to get the most out of your benefits offering. Getting started can be daunting if comms isn’t your forte, which is why we’ve put together a guide to communicating employee benefits effectively.

Manage Your Techscheme And Other Benefits With Drewberry

Want to offer Techscheme, but already juggling too many benefits and providers? That’s where your Drewberry experts come in.

Why Speak to Us?

We started Drewberry™ because we were tired of being treated like a number.

We all deserve a first class service when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.

• We are award winning 🏆 independent insurance advisers who work with all the leading UK insurers
• You’ll speak to a dedicated expert from start to finish
• We are very proud of the 3900 and growing independent client reviews rating us at 4.92 / 5
• We are authorised and regulated by the Financial Conduct Authority. You can find us on the financial services register here 🧐
• Claims support when you need it most.