The flexible compensation It is a mechanism that allows workers to allocate up to 30% of their gross annual salary to essential products and services on a day-to-day basis, which are exempt from personal income tax. It is the case of restaurant check, aid for daycare or public transport and also for travel in a private vehicle through mileage.
This program, through its tax exemptionmakes it easier for workers to enjoy significant savings, which allows them to maximize their net annual salary.
Habitually is the company the one that configures the desired flexible compensation plan, including those services that you want to offer your employees. After the program is set up, it is the workers who choose their plan voluntarily and based on both their needs and their personal circumstances. In this way, they specify which products and what amounts of their salary they want to allocate to each of them.
In addition to employees, companies also benefit from these measures. With this product, they see how the net remuneration of their employees increases, which results in greater productivity and an increase in their satisfaction with the organization, without this entailing an increase in salary costs. That is to say, without modifying the salary of the workers, they obtain greater satisfaction on their part. Talent retention is also favored with these types of measures that increase the well-being of workers.
All the employees, regardless of their position, have the right to configure their flexible compensation system. There are no restrictions, since is open and 100% voluntary.
Social benefits: non-monetary benefits
The social benefits, on the other hand, are goods or services that the company offers to workers as remuneration or payment in kind, regardless of their salary. In fact, they are non-monetary benefits, and cannot be replaced by money, that is, they have a non-remunerative legal nature. The organization assumes all its cost and its implementation usually depends on the collective agreement to which it is attached, salary policies, internal human resources policies, talent management policies, etc.
This concept refers to benefits for workers that are not included in their payroll and that improve both their quality of life and that of their environment.
Social benefits are usually applied to the entire workforce, while flexible remuneration is an à la carte choice, according to the needs of each worker. Besides, Social benefits are taxed to Social Security and the rattribution Fflexible no.
But, without a doubt, the main difference refers to the fact that Social benefits are remuneration above the worker’s salary and it is the company that assumes the entire cost of the services. In flexible remuneration, on the other hand, part of the employee’s salary is used to pay for the services he chooses, but at a lower price than the market price. The products to be received in kind, in the case of flexible remuneration, are at the professional’s choice and, as a result, the worker will see his net salary increased.
