we live quite difficult times, both for workers and for companies, and the social benefits can end up making a huge difference. Now, what are we talking about when we refer to these? How are they managed? What tax effects do they have for workers? Do they really make a big difference? There are many questions around this formula that continues to gain popularity, so it is best to answer them.
The addresses of the companies, and especially directly the managers and teams of human resources, are experiencing in all its harshness a very complex economic scenario, in which prices have been rising for more than a year and, consequently, workers demand wage increases so as not to lose purchasing power, an understandable position. But the rise in prices does not translate, in the vast majority of cases, into an improvement in company income, so the traditional wage increase is not possible. That’s where the social benefits come into play. As? Well, we explain it to you, in detail, in this totally free ebook from Cobee.
And what are the Social Benefits, which we can also refer to as Flexible Remuneration? We start from the fact that the worker is entitled to a gross annual salary, a salary that, of course, is subject to certain charges that, once applied, translate into the net. And, of course, once the worker receives said net in his monthly payroll, he logically uses that money to make a series of payments for products and services.
However, companies have the possibility of offering their workers some of these products and services, the cost of which is deducted from the worker’s salary. And what is the advantage of this model, compared to the fact that it is the employee himself who makes said payments once he has received his payroll? Well, there are actually two advantages:
- The first is that the cost of such products and services is deducted from the gross salaryso that when making subsequent withholdings, these will be lower (since they are applied to a lower value), since the worker’s gross remuneration goes from being No. To be N-price of the product or servicesince the cost of social benefits is not included in the calculation of withholdings.
- The second is that, with proper management, companies can obtain more advantageous prices than those offered to end users. Thus, the worker will save part of the price and, in addition, will see his tax rate reduced proportionally by the value of the social benefits.
Putting a social benefits plan in place can provide enormous advantages to workers, thus making it easier for companies to retain talent. And this is something so valued that, as we can read in the IV Cobee Employee Benefits Trends Report 2023the Flexible Compensation or Social Benefitshave become the fundamental factor for 9 out of 10 Spaniards who are looking for a new job.
The implementation of a Social Benefits program must, however, be sensitive to multiple factors, such as the profile or profiles of workers, the current market situation, etc. However, with the right help, this process can be fast and effective, which will make our profile as an employer much more attractive. Thus, if you are interested in introducing Flexible Compensation in your company, don’t wait any longer and download this one now e-book 100% free from Cobee, where you will find answers to all your questions.
