In an increasingly competitive work environment, employee wellbeing has become a strategic priority for companies. Caring for people not only improves their satisfaction and quality of life, but also boosts productivity, engagement and talent retention.
In this context, two concepts stand out for their relevance: the social benefits and the flexible compensation. Although both are part of the non-wage compensation package, there are important differences between them. Understanding these differences allows companies to design more efficient, fair and motivating compensation programmes.
Salary is no longer the only factor determining job satisfaction. Today, employees especially value wellness policies, family reconciliation and opportunities for personal growth.
Social benefits and flexible remuneration are key tools in this transformation. They allow companies to take care of their team in a tangible way, while optimising costs and taking advantage of tax benefits. In short, are pillars of an emotional wage strategy that reinforces the corporate culture.
If you want to go deeper into the impact of well-being at work, we recommend you to read Employee benefits: Which are most valued?
Social benefitss are benefits or services that the company offers to its employees. above the basic salary, at no cost to them. Its aim is to improving general well-being and strengthen their bond with the organisation.
These benefits can range from basic services to more specialised solutions, depending on the size and needs of the company.
Among the most common are:
In addition to improving employee satisfaction, these benefits include 100% deductible for corporate income tax purposes, They are therefore also fiscally advantageous for companies.
For a more detailed explanation of their advantages, types and practical examples, please visit our article Employee benefits: what are they, types and advantages for your company?
The flexible compensation is a remuneration model that allows each employee to choose how to receive part of their salary, by spending up to 30 % of their gross annual salary on products or services exempt from personal income tax.
This means that it can save taxes and enjoy greater purchasing power, without the company having to increase its wage bill.
For example, an employee may decide to spend part of his or her salary on meal tickets or transport, and another part on training, depending on his or her personal needs.
For full details on how it works, legal limits and tax benefits, see our complete guide: Flexible Compensation: A complete guide
Current legislation stipulates that the total amount for flexible remuneration may not exceed 30 % of the gross annual salary. If this limit is exceeded, the excess is subject to the usual withholding tax.
Although both concepts aim to improve employee welfare and increase purchasing power, there are fundamental differences between them:
| Flexible Compensation | Social Benefits | |
| Relationship to wages | Within the basic salary | Above the basic salary |
| Costs | Taken on by the workers | Undertaken by the company |
| Flexibility | Each employee chooses how much of his or her salary to spend on each of the services. | Standard for all employees or groups of employees |
| Employee tax benefits | Salary money used in flexible remuneration services is exempt from personal income tax. They pay social security contributions. | They are exempt from income tax and pay social security contributions. |
| Limits | Up to 30% of annual gross salary | Up to 30% of annual gross salary |
There is various services that can be offered through flexible remuneration or social benefits, The new solutions, enabling companies to provide a wide range of benefits to their employees. Among the main solutions are:
Yes, it is possible and, in fact, more and more companies are adopting a mixed model which combines both flexible remuneration and subsidised social benefits.
This approach allows companies to offer a solid foundation of standard benefits to all employees at the same time, provides additional options that employees can choose according to their individual needs. If you want to discover how the Mixed Model works read our article!
To find the most suitable and effective solution for your company, we invite you to contact us. With our experience and variety of services, we can help you design a employee benefit plan that maximises the well-being of your employees and improves the competitiveness of your business.
The choice between social benefits, flexible remuneration or a mixed model will depend on several factors: the size of the company, the profile of the employees, the human resources objectives and the tax strategy.
A good starting point is to analyse:
Having an expert partner for benefit solutions, such as Edenred, The plan facilitates the implementation and management of the plan, ensuring that both the company and its employees get maximum value.
Understanding the difference between social benefits and flexible remuneration is key to designing a flexible remuneration system. modern and effective remuneration policy.
The two systems are complementary: social benefits reinforce collective well-being, while flexible remuneration enhances personalisation and individual savings.
Companies that combine both formulas achieve teams that are more motivated, committed and loyal to their corporate culture.
Do you want to implement a tailor-made benefit plan? Contact with Edenred and find out how we can help you create a reward strategy that enhances wellbeing, productivity and talent retention.
