Providing benefits to employees is today the standard of every company that tries to increase their satisfaction and optimize costs. Thirteenth salary, bonuses, vouchers for cultural events or allowance for a language course? These are all ways in which every employer can motivate employees and thank them for great work performance. Which of these benefits are economically more advantageous for the employer?
The employer can provide benefits in various forms. Most often, these are bonuses, financial rewards for projects, or vouchers for sports and cultural events. Some employers decide to pay employees lower cash benefits than originally planned, knowing that they are subject to levies and taxes. However, there are also exceptions, thanks to which the employee receives the full amount of the benefit and the employer saves.
Types of benefits and their costs
Monetary benefits
Monetary benefits such as bonuses, bonuses or 13th salary are subject to levies and taxes. For example, if an employer provides an employee with bonuses worth €712,77, the employer's total costs will increase to €970,75 due to levies. The employee receives a net income of €500 after taxes. Even if these benefits are tax-deductible, the cost to the employer is still higher compared to non-monetary benefits.
Non-monetary benefits exempt from tax
Non-monetary benefits such as shopping vouchers or cultural events can be more advantageous for the employer. If an employer provides an employee with a benefit worth €500, which is exempt from tax by law, the employer's costs are the same as the value of the benefit - that is, €500. It means that the employee will receive a net income of €500, without additional costs for the employer.
The employer will save thousands of euros
Non-monetary benefits are also more advantageous for employers with a higher number of employees. An example is a business entity that employs 100 employees and considers between monetary and non-monetary benefits.
First alternative: Cash benefits
If the employer provides each employee with bonuses in the amount of €712,77, the employer's total costs will reach €97 (€075 per employee). After taking into account tax reliefs and levies, the after-tax economic result will reach €970,75.
Second alternative: Non-monetary benefits
Providing non-monetary benefits in the amount of €500 for each employee means a total cost to the employer of €50 (€000 per employee). After taking into account the tax exemption, the economic result after tax reaches €500, which represents a saving of €192 compared to cash benefits.
What are the other benefits of non-monetary benefits?
Non-monetary benefits in the amount of €500 are not only an attractive way of rewarding employees for employers, but also bring significant administrative relief. Thanks to the tax exemption, accounting is simplified and the administrative burden is reduced. The employer can also reward his employees in the full amount of the reserved budget without additional fees.
Non-monetary benefits are also a great way to increase the result of management in the accounting book, thereby reducing the risk that the company will fall into a crisis and improve the financial indicators of the employer during financial analysis (e.g. when applying for a loan from the bank or when evaluating the employer by business partners). .
The Edenred card will provide tax relief and greater flexibility
One of the ways to give employees more flexibility in choosing benefits is the introduction of the Edenred card. This card can be provided as a non-monetary benefit that is exempt from tax and levies. Employees can thus individually choose the goods or services that best suit their needs and interests, such as catering, cultural events or leisure activities.
