Quick Insights: Save As You Earn (SAYE)

Save As You Earn (SAYE) schemes, also known as Sharesave, offer a unique way for startups to incentivise employees through regular savings and share options. In this Quick Insight, we’ll explore how SAYE schemes work, their benefits, and why they might be the right fit for your startup.

What is SAYE?

Overview of SAYE

SAYE schemes allow employees to save a fixed amount of money each month, typically over a period of three or five years. At the end of the savings period, employees can use their saved funds to buy shares in the company at a price set at the beginning of the scheme, often at a discount. If they choose not to buy the shares, they get their savings back, usually with a tax-free bonus or interest.


All employees who have been with the company for a specified period (up to five years) are eligible to join the SAYE scheme. This inclusivity can help foster a sense of ownership and commitment across the entire workforce.

Benefits of SAYE for Startups

Low-Risk Incentive

SAYE schemes provide a low-risk incentive for employees, as they can either purchase shares at a potentially discounted price or simply take their savings back with a tax-free bonus. This dual option makes SAYE an attractive and low-risk way to engage employees in the company’s growth.

Encourages Regular Saving

By committing to save a fixed amount each month, employees build a habit of regular saving. This disciplined saving approach can be financially beneficial for employees while aligning their interests with the company’s success.

Tax Advantages

There are significant tax advantages associated with SAYE schemes. Employees do not pay income tax or National Insurance on the difference between the exercise price and the market value of the shares at the time of purchase. Additionally, any interest or bonus received is also tax-free.

Implementing SAYE in Your Startup

Setting Up the Scheme

Setting up a SAYE scheme involves defining the terms, such as the savings period (three or five years), the monthly savings amount, and the option price. You’ll also need to notify HMRC and ensure compliance with their regulations.

Communicating the Benefits

It’s important to clearly communicate the benefits of SAYE to your employees. Explain how the scheme works, the potential financial advantages, and how participating in SAYE aligns with their and the company’s long-term interests. Providing clear, accessible information can help maximise employee participation and engagement.

Managing the Scheme

Administering a SAYE scheme involves managing the monthly savings contributions, tracking employee eligibility, and ensuring compliance with the scheme’s rules. Consider using professional services (like a certain startup specialist!) and software solutions to streamline the administration process and maintain accuracy.

👉 Plan for the financial impacts of SAYE with our downloadable Cashflow Model template!

Enhancing Employee Engagement

Inclusive Participation

SAYE schemes are inclusive, allowing all eligible employees to participate regardless of their role within the company. This broad participation can enhance overall employee morale and create a shared sense of purpose.

Long-Term Motivation

By offering a path to share ownership, SAYE schemes can motivate employees to work towards the company’s success over the long term. Employees who see the potential to benefit directly from the company’s growth are likely to be more engaged and productive.

Aligning Interests

SAYE schemes align employees’ interests with those of the company and its shareholders. When employees have a stake in the company’s success, they are more likely to contribute positively to its growth and profitability.

By implementing a SAYE scheme, your startup can encourage regular saving, offer attractive financial benefits, and foster a culture of shared success and long-term engagement.

Next, we’ll explore “Non-Approved Schemes,” discussing how these flexible schemes can benefit startups and their employees. Stay tuned! 

Considering your employee share scheme options? Let Elliott Gaspar, Standard Ledger’s Founding UK Director, help you untangle the specifics. With expertise in financial strategy and a track record of supporting startups, Elliott can provide you with the insights you need to make informed decisions. Book your free, no-obligation chat today!