Five key benefits of implementing share-based payments

For SMEs, share-based payments can be a powerful tool to motivate and retain employees by offering equity in the company. One popular option is the Enterprise Management Incentive (EMI) scheme, which provides substantial tax benefits for both employees and businesses. With EMI, employees can buy shares at a pre-agreed price, aligning their interests with the company’s growth. 

Here are five key benefits of implementing share-based payments, specifically through schemes like the EMI (Enterprise Management Incentive):

1. Employee Retention: Offering shares gives employees a long-term stake in the company, boosting loyalty and reducing turnover.
   
2. Increased Motivation: Employees are more driven to contribute to the company’s success when they benefit directly from its growth.
   
3. Tax Advantages: Both employers and employees enjoy significant tax reliefs under EMI, including reduced income tax and National Insurance.
   
4. Attract Top Talent: Equity offers make your SME more appealing, particularly to highly skilled candidates.
   
5. Cash Flow Preservation: Share options compensate employees without immediate cash outflows, easing pressure on your working capital.

At ChadSan, we help SMEs design and implement EMI schemes that align with your business objectives, ensuring compliance and maximizing the scheme’s benefits.

For any questions or further details, get in touch with our Head of Tax and Compliance, Jacquetta Jackson jacquetta.jackson@chadsan.com or call her on 01483 399275. She’ll be happy to assist you!