FLEXIBLE REMUNERATION IN 2022: HOW IT HELPS THE COMPANY
You’ve probably heard of flexible remuneration, but did you know that a flexible remuneration plan offers advantages for companies and employees? This option allows employees to spend up to 30% of their gross annual salary on day-to-day services such as restaurants, transport, employee training… and this part is exempt from income tax. We are talking about a double benefit, as employees obtain savings while maximising their annual net salary.
How does Flexible Remuneration work? The company must set up a plan adding the services they will offer to the employees. From this, employees should be able to tailor their plan to their needs. In this way, they will be able to enjoy the services they are most interested in. Remember that all employees, regardless of their position, have the right to configure their plan.
Table of content
- 5 keys to understanding flexible pay
- Why offer flexible remuneration to your employees?
- How to explain Flexible Pay to your employees
- How to set up a flexible pay programme
5 keys to understanding flexible remuneration
If you are wondering whether flexible remuneration and remuneration in kind are the same, the answer is no. Although they are closely related, they are not the same. Although they are closely related, they are not the same. You may find information that treats the two concepts as synonyms, but we are here to clarify.
When we talk about remuneration in kind, we refer to the remuneration received by the employee, whether they are products or services related to their work, such as flexible remuneration such as training. We are talking, for example, about medical insurance, car, restaurant ticket… Receiving part of the salary in cash and another part in kind, is what allows us to talk about flexible remuneration.
Why offer flexible pay to your employees?
It should be borne in mind that the total consumption of the part allocated to flexible remuneration cannot exceed 30% of the gross annual salary. With this in mind, there are a variety of products that we can offer to employees.
- Flexible remuneration and training go hand in hand. It is one of the most important advantages that can be offered to employees. Offering training courses to improve their skills, be it languages, soft skills, programming… is one of the most beneficial rewards for both parties.
- The traditional restaurant ticket. Whether in the form of a paper cheque or a card, meals are the star benefit. If employees prefer not to cook, with this benefit they get a discount on their meal consumption. This service can be regulated by the company itself, depending on the conditions it wants to offer its employees.
- Since 2010, it is the Spanish State itself that wants to favour and promote the movement of employees by public transport. Therefore, companies are committed to this service.
These are some of the services that flexible remuneration can offer your employees. Some are more traditional and others less common, such as housing or a car.
How to explain Flexible Remuneration to your employees
Flexible remuneration is an increasingly common practice in companies to care for and maintain the team. Employee wellbeing is at the forefront of the minds of HR managers who implement policies aimed at employee care. One of the most effective motivators is flexible pay, but sometimes companies do not know how to communicate the benefits to employees.
When offering the option of flexible remuneration, companies should make it clear that the greatest benefits are for the employee. They should remember that there are tax advantages with these services and that flexible pay makes life easier for employees as it can be tailored to their basic needs. Finally, it is important to stress that these are employee benefits and the most important thing is their ease of use.
How to set up a flexible remuneration scheme
When a company wishes to incentivise its employees with flexible remuneration, it must always bear in mind that they are the main beneficiaries, so communication must be as fluid as possible. Here are the steps to follow to create a good flexible remuneration plan:
- Evaluation and survey.
- Communication with employees.
- Simulation of savings with flexible remuneration.
- Recruitment and implementation.
Remember that the services offered by flexible remuneration have some legal limitations. Here are the most important ones:
- In restaurant cheques, the maximum amount that can be received is 2,420 euros per year (eleven euros per day up to a total of 220 days per year).
- The transport card is financed up to 136.36 euros per month.
- For childcare, there is no limit on the amount
- In health insurance, covering the whole family, the ceiling is 500 euros per person per year.
If you want to offer flexible remuneration as training to your employees, discover the best training for your employees at Classgap for Enterprise. Contact us today and start developing the talent of your employees.