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View full libraryThis Discounted Goods for Employees Policy sets out the arrangements for employees to purchase goods from the organisation at a discounted price. It provides clear rules on eligibility, discount levels, purchase limits, exclusions and responsible use while supporting a consistent and fair approach.
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1 Overview
1.1 [Company Name] may provide eligible employees with the opportunity to purchase certain goods supplied by the organisation at a discounted price.
1.2 The purpose of this policy is to explain how the employee discount scheme operates, who may use it, what goods are eligible, the restrictions that apply and the circumstances in which access to the scheme may be withdrawn.
1.3 The employee discount is a discretionary benefit unless expressly stated otherwise in an employee’s contract of employment or another written agreement.
2 Scope
2.1 This policy applies to employees who are eligible to participate in [Company Name]’s employee discount scheme.
2.2 Unless specifically stated otherwise, the scheme does not apply to former employees, contractors, agency workers, customers, suppliers or other third parties.
3 General principles
3.1 Eligibility
3.1.1 Employees are eligible to participate in the scheme once they have [completed their probationary period / completed [X] months’ service / met the other eligibility requirements specified by the organisation].
3.1.2 [Company Name] reserves the right to specify particular eligibility conditions for the scheme. Eligibility requirements will be communicated clearly to employees and applied consistently.
3.1.3 Employees who are absent from work, including employees on family leave, sickness absence or other authorised leave, will normally retain access to the scheme provided they remain employed and otherwise eligible, unless a specific and lawful restriction applies.
3.2 Discount available
3.2.1 Eligible employees may receive a discount of [X%] on eligible goods purchased directly from [Company Name].
The discount applies only to goods that the organisation has identified as eligible under
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Employee discounts can be a useful benefit, particularly where an organisation manufactures or sells goods that employees may wish to purchase for personal use. This policy provides a straightforward framework for offering discounts while protecting the organisation from excessive, inconsistent or inappropriate use of the scheme.
The policy establishes clear eligibility rules so employees understand when they can access discounted goods and whether any qualifying period or other conditions apply. Clear rules also help managers and those administering purchases apply the benefit consistently.
The organisation can define the discount available, which products are included and whether limits apply to the value, quantity or frequency of purchases. This allows the scheme to remain commercially sustainable while still providing a meaningful employee benefit.
Employee discounts are intended for legitimate personal purchases and should not normally be used to obtain goods for resale, commercial gain or unauthorised third parties. The policy establishes clear expectations around discount codes, staff accounts, purchase records and the transfer or resale of discounted goods.
The tax treatment of discounted goods can depend on the circumstances, including the price paid and the employer’s cost of providing the goods. The organisation should therefore ensure that its payroll, finance and tax arrangements are considered where required rather than assuming that every employee discount is tax-free.
The policy explains when access to the scheme ends and allows the organisation to withdraw or suspend access where there is evidence of misuse. Serious or deliberate misuse may also be dealt with under the organisation’s disciplinary procedure.
Use these best practice actions, recommended timescales and process stages to understand when and how the Discounted goods for employees policy should be used, helping ensure each step is handled consistently and appropriately documented.
Understand the common mistakes to avoid when using this HR template, helping you reduce risk, prevent unnecessary costs and ensure the process is handled correctly.
The organisation should define its eligibility rules clearly. This might include all employees, employees who have completed a qualifying period, or particular categories of worker. Whatever approach is adopted should be applied consistently and reviewed for any equality implications.
This is a decision for the organisation. The policy should clearly state whether purchases for immediate family or members of the employee’s household are permitted and whether any limits apply. If permitted, the goods should not normally be purchased for resale or commercial purposes.
Employee discounts should normally be intended for personal use unless the organisation expressly permits otherwise. The policy can prohibit resale and commercial use where the organisation wants to protect the scheme from misuse.
Yes, unless the benefit has been incorporated into the employee’s contractual terms or another legal restriction applies. The organisation should communicate significant changes clearly and should take appropriate advice where there is any question about contractual entitlement.
Not necessarily. The tax treatment depends on the circumstances, including the price paid and the employer’s cost of providing the goods. Finance or payroll should check the treatment where the discount could create a taxable benefit.
HRDocBox policies provide a structured starting point designed around UK employment practice and legislation. They save time by bringing the key practical considerations together while allowing employers to adapt the policy to their own benefits, products and internal procedures.
How this content is developed and reviewed
The Discounted goods for employees policy template is developed using a practical HR methodology that considers current UK employment legislation, ACAS guidance, CIPD good practice and the real-world HR process it supports. Templates and supporting information are regularly reviewed and updated, with additional reviews triggered by significant changes to legislation, guidance or established HR practice, helping ensure each document remains practical, relevant and suitable for UK employers.
Darryl Horn, Chartered HR Director
Darryl is a Chartered HR professional with over 25 years' experience in senior HR and employee relations roles.
He has extensive practical experience of managing pay and benefits HR processes and founded hrdocbox to provide businesses with practical, professionally developed HR resources grounded in UK employment law and best practice.
HRDocBox has been creating practical UK HR documents since 2009.
"Darryl provides support and advice with excellent judgement, and has a strong understanding of people, policies and UK employment legislation."
"He is someone I trust; consistent, dependable, and committed to doing things properly."
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