Taking that first step on the career ladder is both self-satisfying and exciting. However, in their eagerness to accept a job many young people overlook the benefits, tax implications and clauses buried in a contract of employment, says Gavin Perrett of Liddle Perrett Wealth Management.
While a mobile phone and company car might be very nice, would you be better off with a higher basic salary and an allowance for business use both in terms of mileage and wear and tear on your own vehicle and opt for a mobile phone of your choosing? Does your new employer offer company healthcare, a pension or other benefits ‘in kind’ and do you know the tax implications associated with such incentives?
A contract of employment should help new employees understand what is expected of them in terms of their role, responsibilities and hours but they should also verify that their wage represents fair industry rates and includes regular pay reviews, whilst checking for nasty surprises such as opt out clauses, and ‘golden hellos’ or ‘golden handshakes’ that could become ‘golden handcuffs’.
‘Avoiding the pitfalls of an unfair employment contract and being able to negotiate a better deal for yourself shouldn’t be a difficult task but with a lack of experience and confidence for many people, especially college leavers and graduates new to the job market, this can be a daunting task,’ says Perrett.
‘Having a specialist inspect the initial contract can ensure new employees make the most of the benefits on offer as well as highlight grey areas or clauses that could leave individuals out of pocket.’
There are many things to consider when it comes to weighing up the pros and cons of an employment contract. Gavin understands the difficulties applicants can go through dealing with complex contracts, especially when they are delighted to be offered the job, but stresses that it shouldn’t detract from being diligent; ‘to the untrained eye a contract has so many clauses and so much small print the mind boggles.’
Luckily he has years of experience in untangling the details hidden in the fine print and can pull out the relevant facts, as well as using his strong financial background to help people make the best choices moving forward. ‘The key is establishing the parts of a contract that just sound attractive, and those that actually are attractive for the employee in the long term.’
‘The importance of understanding every detail of a contract should not be underestimated,’ Gavin concludes, ‘and using an experienced specialist to review and even negotiate on your behalf needn’t be expensive and could actually pay for itself in the long run. There’s nothing to be ashamed of if you don’t fully understand healthcare benefits, sick pay eligibility, tax liabilities on incentives or bank holiday and holiday allowance.’
Liddle Perrett has many years experience in financial services industry and their primary aim is to look after the financial well being of its clients for today, tomorrow and in the long term.