3

Some companies are giving employees what they call an "inflationary lump sum" to help them cope with cost of living issues caused by high inflation. See for example:

https://www.incomesdataresearch.co.uk/resources/news/nearly-one-in-five-employees-awarded-lump-sum-payments

Under UK law what kind of payment is it? Is it the same thing as a bonus?

What rules apply?

For example, can an employer do as they wish? is it entirely dependent on what's in the contract? is it legal to give to everyone except those working their notice period?

1 Answer 1

6

Under UK law what kind of payment is it? Is it the same thing as a bonus?

Essentially yes

What rules apply?

Assuming the employee is standard PAYE then the money will be subject to tax and NI the same as any other lump sum salary payment.

For example, can an employer do as they wish? is it entirely dependent on what's in the contract? is it legal to give to everyone except those working their notice period?

Things like this aren't typically specified in a contract - and as such are almost completely discretionary. They can exclude people working their notice period, people who have less than a certain amount of time employed etc. What they can't do is exclude people based on protected characteristics - they can't say "Only women get this" or "Only white people".

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.