Employees increasingly value being able to tailor their salary to their lifestyle. A plan for flexible compensation allows the company to do so without increasing its costs. If you are wondering what is, how it works and how to implement it correctly, Here you will find a complete and practical guide to implement it in your organisation.
A flexible remuneration plan (also known as a flexible compensation plan) is a remuneration system that enables employees to voluntarily allocate a part of their gross salary to remuneration in kind, choosing between different goods or services with tax advantages.
These may include meal tickets, transport, childcare, training or health insurance, among others.
In this way, the employee optimises his or her take-home pay without the company increasing its costs, and the organisation improves its remuneration policy and its ability to attract and retain talent.
In other words: is a smart way to optimise payroll for both parties., as shown in this example of payroll with flexible remuneration.
Before we start, do you know what the difference between Social Benefits and Flexible RemunerationRead our article!
Implementing a flexible remuneration plan requires planning and good communication. Follow these 6 steps:
Assess the objectives of the plan (retention, motivation, taxation, etc.) and employee profiles. Listening to their needs will help you design a truly useful flexible compensation plan.
Expert advice: conducts a short internal survey to find out which benefits are of most interest before launching the programme.
Define which products or services will be available, respecting the 30 % limit on salary in kind. Select a reliable supplier, which simplifies management and ensures tax compliance.
At this stage, it is important to meet with each employee to discuss how much of his or her salary can be spent on the various services included in the scheme and calculate the possible scenarios according to your needs. The duration of the plan should also be defined and the agreed conditions should be put in writing.
In short, it is a question of designing a personalised flexible remuneration programme, adapted to the situation of each employee.
In order to ensure its success, it is essential to explain clearly the tax and economic benefits what each option entails. In this way, employees will fully understand what they are selecting and avoid misunderstandings or surprises in the future.
Once the collection system for each employee has been established, it is time to put it into practice. From here, the daily operational work begins: the monthly management related to the contracting of products, the preparation of payrolls and the accounting registration of the payments made by the organisation.
It is worth noting that this management can be outsourced without increasing costs. Nowadays, thanks to the platform Edenred Flex, The administration of product procurement has become much more streamlined and efficient. The time spent on these tasks has been significantly reduced, both for the company and the employee requesting the solution.
Here you can see a example of payroll with flexible remuneration!
Internal communication is key. Clearly explain the benefits, practical examples and frequently asked questions. You can use internal briefings, infographics or short videos to increase adoption.
Review the results of the plan: how many employees use it, which benefits are most popular, and whether it has improved satisfaction or retention. Adjust terms and conditions according to fiscal changes or staff needs.
Throughout the process, there are intangible elements (over and above the payroll accounting) that will have an impact on the successful implementation of flexible remuneration:
Each company can configure its plan according to its workforce and budget. Some common examples are:
Once you have decided to implement a flexible remuneration programme, you need to choose with whom to do it. The Flexible Remuneration of Edenred is perfectly adapted to the needs of each type of employee.
Thanks to its platform Edenred Flex, Edenred's flexible remuneration system allows companies and employees to manage flexible remuneration in a simple and efficient way. In addition, Edenred offers comprehensive support, accompanying companies and their employees throughout the benefits selection process, ensuring that each person finds the options that best suit their needs and lifestyle.
