Staff suggestion scheme rules

You can reward your employees for ideas that contribute to your business tax and NI free. For the exemption to apply conditions must be met which should be set out in a special policy.

Cash rewards for suggestions

Legislation authorises employers to make tax and NI-free payments to employees through a staff suggestion scheme. It is relatively simple to set up a scheme.  You tell the staff that they will receive a small payment in return for ideas that may help the business. Use our Staff Suggestion Scheme Rules policy document for this purpose. Circulate the document to all your employees.

Tax and NI-free amounts

You can pay up to £25 for any suggestion but if it is implemented and likely to financially benefit your business you can pay the lower of: £5,000; and 50% of the expected financial benefit to your business in the first year following implementation of the suggestion, or 10% of the expected financial benefit over five years.