Remuneration in kind: an alternative with tax benefits

During contract negotiations, the possibility of paying part of the salary in a form other than money is often raised. This is the remuneration in kind (Article 26 The new system of monetary payments is increasingly gaining support, both from employers and from workers.

In fact, those who know the benefits of payment in kind Is this the case for you? Do you know how you could help your employees by giving them this possibility? As an employee, do you know why you might be interested in payment in kind?

Questions and answers on payment in kind

1. For whom is the payment in kind?

Remuneration in kind is not a territory reserved for managers and senior executives, although it is true that at these levels it is more common. This type of perception is not yet offered by all companies, despite the fact that is a system that brings benefits  for both the employee and the employer; and, as a result, some workers should be interested in them if there is no mention of the possibility during the negotiation of their contract and if the Collective Bargaining Agreement applicable to them does not provide for specific options either..

2. What percentage of salary can be paid in kind?

The Workers' Statute sets the maximum of the remuneration in kind at 30% of total pay. This does not mean that there is a choice between receiving the entire salary in cash or adapting to this percentage, but leaves the employee, when offered the option to receive a part of his salary in kind, free to tailor it to his needs, in terms of:

• The proportion of salary in kind that you wish to receive (always without exceeding the maximum amount set by the ET).
• The type of products and services you could benefit from through the flexible remuneration scheme.

3. What motivates payment in kind?

The causes that lead companies and workers to decide on the remuneration in kind have to do with the tax savings that such measures guarantee.

4. What should compensation in kind not be confused with?

When considering this alternative form of wage collection, it should be borne in mind that not everything can be classified as remuneration in kind. In fact, all too often, it is confused with other concepts that are not equivalent, such as:

• Advantage or benefit: Although this type of remuneration entails a number of advantages, including tax advantages, they cannot be considered as advantages in themselves, since the latter are related to a role or position in the company, which is not necessarily the case for payment in kind..
• Donation: Donation is an altruistic action and this motivation differentiates it from payment in kind, which is a consideration..

5. What types of remuneration in kind are there?

The options for compensation in kind to choose from will depend on each company., The most sought after are usually those related to products such as:

• Childcare ticket

• Ticket restaurant

• Transport ticket

Show your employees how much you care by offering them flexible pay that increases their earning power. through the associated tax incentives and allows the individual wage to be tailored to the needs and interests of each worker.