The social benefits son beneficios en especie que the company pays above the agreed salary, while the flexible compensation is a modality in which the employee allocates voluntarily part of their gross salary (up to 30%) to the payment of products exempt from income tax, formalising this decision through a salary novation.
Both are non-monetary remuneration tools that are based on Article 42 of Law 35/2006 of the Personal Income Tax (IRPF), but they differ in who bears the cost, what legal limits apply, and what degree of customisation they offer To the employee. In this article, we compare both systems in detail and explain which is best and when – or how to combine them in a mixed model that it adds the advantages of both.
Salary is no longer the only factor determining job satisfaction. Today, employees particularly value well-being policies, work-life balance, and opportunities for personal growth.
Employee benefits and flexible remuneration are key tools for this transformation. They allow companies to tangibly look after their team, while optimising costs and taking advantage of tax benefits. Ultimately, 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 valued most?
Employee benefits are advantages or services that a company offers to its employees above the basic salary, at no cost to them. Its aim is to improving general well-being of the worker 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:
Beyond improving employee satisfaction, these benefits are 100% deductible for corporate income tax purposes, which makes them fiscally advantageous for companies too.
For a more detailed explanation of its advantages, types and practical examples, consult our article Employee Social Benefits: what they are, types, and advantages for your company
La Flexible remuneration it is a form of remuneration in kind regulated by the Article 42 of Law 35/2006 on personal income tax, which allows each employee to voluntarily allocate up to 301% of your gross annual salary to the payment of products or services exempt wholly or partially from income tax. Adherence is formalised by salary renegotiation between employer and employee.
Upon reducing the taxable base for Personal Income Tax, the employee pays less tax on the same gross income and increases their net disposable income, without the company increasing its salary costs. For example, an employee can allocate part of their salary to Ticket Restaurant or Edenred Mobility, and another part to training or health insurance, according to their personal needs.
If you wish to know all the details about its operation, legal limits, and tax benefits, consult our complete guide: Flexible Remuneration: A Comprehensive Guide
The total amount allocated to flexible remuneration may not exceed 301% of the gross annual salary Article 42 of Law 35/2006 establishes that if this limit is exceeded, the excess is taxed as ordinary employment income.
Although both concepts aim to improve employee welfare and increase purchasing power, there are fundamental differences between them:
There is Various services that can be offered through flexible remuneration or employee benefits, The new solutions, enabling companies to provide a wide range of benefits to their employees. Among the main solutions are:
Yes, it's possible and, in fact, more and more companies are adopting a mixed model which combines both flexible remuneration and social benefits as a subsidy.
This approach allows companies to offer a solid foundation of standard benefits to all employees while, 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 range 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 employee profile, human resources objectives, and fiscal strategy.
A good starting point is to analyse:
Having an expert partner for benefit solutions, such as Edenred, facilitates the implementation and management of the plan, ensuring that both the company and employees obtain maximum value.
Understanding the difference between social benefits and flexible remuneration is key to designing a Modern and effective remuneration policy.
Both systems are complementary: social benefits strengthen collective well-being, while flexible remuneration enhances personalisation and individual savings.
Companies that combine both formulas achieve more motivated, committed teams that are loyal to their corporate culture.
Would you like to implement a bespoke benefits plan? Contact Edenred and discover how we can help you create a remuneration strategy that promotes well-being, productivity, and talent retention.
My professional career has been developed in areas such as training, consulting, and transformation within companies of different sizes and sectors, both within and outside of Spain. I am currently responsible for the Corporate Sales team at Edenred Spain, helping organisations to strengthen their value proposition through compensation and benefits strategies that generate value for both people and the business.
