Did you know that you can improve the purchasing power of your employees without increasing the cost of wages?
In this article we show you a example of payroll with flexible remuneration, with products such as Ticket Restaurant, Childcare Ticket and Transport Ticket, to understand in a practical way how flexible remuneration is reflected in the payroll and how much can be saved.
A flexible payroll is a compensation model that allows employees earmarking part of their gross salary for certain tax-advantaged items, without increasing costs for the company.
This system of Flexible remuneration is based on taking advantage of benefits provided for by the regulations which are exempt in whole or in part from personal income tax, allowing the worker to increase their purchasing power and the company to offer a more attractive value proposition.
Let's look at a practical example to understand the economic impact of implementing flexible remuneration:
Initial conditions:
Annual savings: 1,261.93 €
I.e. an extra monthly allowance or a paid holiday.
Flexible remuneration is shown on the payroll as specific concepts exempt from income tax, which indicate what portion of gross salary is allocated to tax-advantaged benefits.
As these amounts are excluded from the tax base, these amounts reduce taxes payable and increase net disposable income of the employee, at no additional cost to the company.
You can easily estimate your own savings with the Edenred flexible benefits calculator.
Enter your details and discover how much you could increase your purchasing power without changing your gross salary.
The amounts designated via flexible remuneration are already considered on the payslip as exempt or partially exempt from personal income tax (IRPF), so when it is time to file the tax return it is not necessary to adjust them manuallyare already excluded from the taxable base of employment income.
For more details on how they are reflected and what limits apply, please see this article: «Flexible remuneration in income tax returns«.
At Edenred we offer you personalised advice on the options that best suit you and your employees' needs. With our experience and technology platform, we can help you implement a flexible payroll that benefits both parties.
If you need more information to define your company's compensation strategy, We can collaborate with you to design a bespoke benefits package. that promotes job satisfaction and talent retention in your organisation.
