Meal vouchers and cash vouchers are two types of benefits that you might give to your employees. Most vouchers are liable to tax, and in some cases, NIC. For further information about this, please refer to HMRC's guidance.
If the voucher is not exempt from tax and you're payrolling benefits, including vouchers, employees will pay tax in the month that the voucher is added to their record. If you're not payrolling benefits, the vouchers are added to the employee's P11D at the end of the tax year, then the employee pays the tax on the amount through a reduced tax-free allowance (i.e., an adjusted tax code.)
In both cases, where the voucher is not exempt from Class 1 National Insurance, this is calculated through the payroll.
How to add meal vouchers and cash vouchers in PayFit
If you haven’t enabled your benefit preferences
From the left, choose Company settings, then Benefit settings.2.
Under the General settings section, click Set benefits preferences.
Answer each of the questions, then click Save.
From the left, choose Company settings, then Benefit settings.
Under the General settings section, click Activate benefits schemes.
Enable Vouchers & credit cards, then click Save.
If you have enabled your benefit preferences
From the left, select Benefits in kind.
Select Vouchers & credit cards.
From the list, find the employee that you want to add the benefit to.
Click See all, and then Add a new voucher or credit card.
Select voucher or credit card & enter the details, then click Save.
⚠️ If you joined PayFit mid-tax year then you can also add the total value of benefits that were given to former employees in the current tax year before you joined PayFit. This allows us to include this value in your P11D(b) submission, if you'd like us to submit this on your behalf ⚠️
How does the voucher appear on a payslip?
You can see the employer's contribution to the vouchers in the top right corner of the payslip, listed as Benefits (this is a combined total of all benefits e.g. gym memberships too).
Any amount taken from the employee's pay towards the cost of the voucher appears as Vouchers & credit cards in the deductions section.