Payments in kind that can be cashed in
Definitions or restrictions
You provide an employee with a payment in kind that can be converted
directly into cash – such as a cheque, Savings Certificate or Premium
Bond.
What to report, what to pay
These payments in kind count as earnings, so:
- add their value to the employee’s other earnings
- deduct and pay PAYE tax and Class 1 NICs using your usual payroll
procedures
Work out the value to use
The value to use is the amount of cash that the payment in kind can
be exchanged for.
Technical guidance
EIM00540: Benefits capable
of being turned into money
