Tax emption for employee flu vaccinations

Healthy and productive staff members are invaluable to employers. who, since the pandemic, are often looking for ways they can help improve employee wellbeing.  

The Covid pandemic has highlighted the need for employers to look at how they can help their employees' physical and mental wellbeing.

This becomes more of a concern as we approach the winter months, where diseases such as Covid and flu become more common again.  

The NHS has recently launched its national winter programme, aiming to vaccinate higher risk individuals against Covid and flu.  However, it is likely that most of your employees will not qualify for free vaccinations under this scheme.  

This is where employers can step in to help protect their workforce.  

Whilst Covid vaccinations are not currently available privately, flu vaccinations can be purchased for employees. 

Tax exemption

The good news is that where an employer provides flu vaccinations at work or vouchers which can be used at a pharmacy (or similar provider), this will be an exempt trivial benefit provided the cost to the employer is less than £50 per person.  

This means that the vaccinations can be provided without any tax liability for the employee or any national insurance being due from the employer.  When coupled with the tax relief to the employer who can claim the costs as a business expense, this produces an economical and tax-efficient way to protect and remunerate employees.  

Beware of the pitfalls

However, tax is rarely straightforward and there are pitfalls of which to be aware:

• You will need to arrange and pay the costs of the vaccinations yourself.  If your employee pays for a vaccination and you reimburse them, this will be a taxable payment and will be subject to income tax as well as national insurance from both the employer and employee.  


• If the cost is more than £50 per employee, the full cost will be a taxable benefit to the employee, resulting in an income tax liability to the employee and national insurance being due from the employer.  In this case, a PAYE settlement agreement (PSA) might be considered.  Our website has further information on PSAs and how they can benefit your employees (PAYE Settlement Agreement for Employee Benefits – Apply Online). 


• The rules differ slightly for directors, who are subject to a £300 cap on the total trivial benefits received in a tax year.  

The use of tax-free benefits can be a great way to provide value and incentive to your employees without incurring additional liabilities.  The provision of flu vaccinations is a great example of this, providing a real tangible benefit your employees’ health and wellbeing at a relatively low cost to your business.  

Further information

If you are interested in learning more about the tax implications of providing flu vaccinations to your employees, or you would like to consider further how benefits can be used to incentivise and reward current or prospective employees, please contact our Employer Solutions team.