Employment Tax

Non-cash earnings ― overview

Produced by Tolley
  • 13 Apr 2022 13:01

The following Employment Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Non-cash earnings ― overview
  • Types of non-cash earnings with a different treatment
  • Tax
  • By reason of the employment
  • Making good
  • Exemptions
  • Value of the benefit
  • Cost to the employer and money’s worth
  • The benefits code
  • Effect of COVID-19 on the benefits code
  • More...

Non-cash earnings ― overview

The charge to tax on employment income specifically includes not only cash payments but also ‘any gratuity or other profit or incidental benefit of any kind obtained by the employee if it is money or money’s worth, or anything else that constitutes an emolument of the employment’. The definition of benefit is very wide and covers items provided for/to the employee and for their family / household.

Types of non-cash earnings with a different treatment

There are some types of non-cash earnings which have special treatment which are outside the scope of this note. This includes the following items:

  1. non-cash earnings provided through a third party rather than the employer may be subject to the ‘disguised remuneration’ rules. See the Disguised remuneration ― overview guidance note

  2. employers may offer employees shares or share options. See the guidance notes on share schemes (see the Comparison of share schemes guidance note as a starting point)

  3. employers may make contributions to pension schemes on behalf of their employees. See the guidance notes on pension schemes (see the Pension scheme types guidance note as a starting point)

This note focuses on other forms of non-cash earnings, often referred to as benefits-in-kind.


In addition to wages and salaries, many reward packages include other items such as the provision of a car, health insurance, childcare or payments of bills such as phones. These are often referred to as benefits-in-kind, BIKs or simply ‘benefits’.

The wide definition of benefits in the legislation includes any form of goods

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