Pay is a key aspect of your relationship with your employees. Setting the right pay rates for your business will likely take into account your need to attract talented employees and retain those that you have already. Above all, pay rewards should be fair, and the process transparent. See how to set the right pay rates.
You may decide to implement a results-related pay system, such as commission or bonuses. These are provided by your business in addition to basic pay and can be used to reward employees who perform at a high level:
- commission is calculated based on the performance of an individual or a team
- bonuses may be connected to the performance of the entire business
Depending on the sector in which your business operates, eg in the catering trade, setting up a tips and gratuities system may be more appropriate. There are some circumstances when tips and gratuities can count towards the national minimum wage. See guidance on tips at work. For further advice on this, you may wish to contact HMRC.
You should be aware that there are certain types of business expenses that are tax deductible and others that are not. They may need to be disclosed to the relevant authorities. Read more on expenses and benefits.