Curious payrise format

[randlemarcus]

Just had my payrise letter. It's come in the form of a one-off single payment that seems to cover the next year, i.e. through to Q3 2018. Aside from the obvious not impacting pensionable pay, and setting 2018 payrise against a baseline of 2016 salary, why would the delightful company have done this? Are there huge tax advantages?

[akirk]

sounds more like a bonus than a pay rise - perhaps it means that any future increases don't have to start from this new level, but from the previous base level... it sounds like a way of stopping payroll from continuing to rise...

[AyBee]

As above, that's a bonus, not a payrise! Are you getting any pension pay (assuming your company pays in a percentage of your salary) on this amount?

[randlemarcus]

Nope, not a penny. And the marginal tax rate means I get maybe 40% of that in my pocket. Not happy, just trying to figure out whether this is because they get massive Corp Tax advantages, or whether this is just there to encourage UK workers to look elsewhere.

[C0ffin D0dger]

As above, you're being shafted. Pay rises should be applied as a percentage of your current salary e.g. getting £10k now, 5% rise equals £10,500. Next rise of 5% you get £11,025. By paying a bonus rather than a rise to your base salary they're avoiding this cumulative effect as well as possibly dodging the additional pension contribution and maybe other stuff too.

Vote with your feet.

[Gary C]

randlemarcus said:

Nope, not a penny. And the marginal tax rate means I get maybe 40% of that in my pocket. Not happy, just trying to figure out whether this is because they get massive Corp Tax advantages, or whether this is just there to encourage UK workers to look elsewhere.

Are you under collective bargaining? Is it an offer or do you just get given a done deal ?

Personal contract, go and argue, collective bargaining, go and complain to the union, Done deal, leave.

Things really have changed, millennials don't remember the power of big company collective bargaining, and unions are a dirty word in some areas, but really, things have swung too far and workers need to get a backbone.

Hated the 70's union leaders, but boy they stopped st like this happening.

Anyway, I'm sure it's a way of reducing pensions/NI contributions, avoid pay rate increasing which has a knock on to the recent holiday pay ruling and save money, and doing just before Christmas (assuming paying this month ?) is a great way of getting the staff not to complain.

Our company is actually good, but even they send us a 'total remuneration statement' just before the union pay bargaining is due to complete which as it includes everything tends to make you feel better off than you though, just before you decide to vote yes or no.

[randlemarcus]

Individual , and no build up. Only for senior folks as well, which makes it worse

[Gary C]

randlemarcus said:

Individual , and no build up. Only for senior folks as well, which makes it worse

Senior ?

Personal contract ?

Go argue !

[superlightr]

feking awful, how nasty of them, you must be gutted to get a pay rise or a bonus. Sue them. the fekers.

Edited by superlightr on Friday 24th November 14:53

[Mr Overheads]

You could always ask your FD. He/She will probably appreciate someone actively taking an interest in why something is done a certain way.

[randlemarcus]

Mr Overheads said:

You could always ask your FD. He/She will probably appreciate someone actively taking an interest in why something is done a certain way.

Possibly. Though my questioning it with my bosses boss seems to have made him quite uncomfortable

Was more interested in whether this bestowed tax advantages on the business that outweigh any bad feeling.

[Jockman]

randlemarcus said:

Possibly. Though my questioning it with my bosses boss seems to have made him quite uncomfortable

Was more interested in whether this bestowed tax advantages on the business that outweigh any bad feeling.

Possibly but I can only think of a minor one off the top of my head.

Companies can use accruals to decrease profit and suppress corp tax. Accruals cover many things but focus in on payroll for this thread. We would typically accrue a week's payroll and I'm now told future holiday pay is a favourite accrual. We would not accrue future wage increases but we would accrue bonuses, Christmas ones being a good example. Make sense?

I'm no Accountant so happy to be corrected.

[mr_spock]

I wonder if they're trying to sell the business. Giving a pay rise as a discretionary bonus would look (or could be presented) quite differently from salaries to a potential buyer.