Employee benefits

What it means

Employee benefits are what comes on top of pay: contributions to the third pillar, transport, training, healthcare, sports passes, a company car for private use.

Each benefit has its own tax and contribution treatment. Some are exempt for the employee up to a cap; others are non-cash income taxed like salary.

What an employer must provide by law is not a benefit: the meal contribution, protective equipment or travel allowances, for example. These follow their own rules and cannot simply be swapped for something else. A benefit is only what the company gives voluntarily, beyond its obligations.

How it works in practice

The economics are worked through the whole chain: company cost, deductibility, taxation for the employee. A benefit exempt from contributions delivers more than the same money added to pay.

The rules belong in an internal policy or a collective agreement. Part of the spending can come from the social fund the company must create anyway.

Before a benefit is introduced we prepare a calculation for one model employee: what it costs the company, how much the employee actually receives and how their net pay changes. For non-cash benefits we also set up how their value reaches the payroll system, so that it is taxed in the right month.

What to watch out for

A benefit once introduced is hard to withdraw: staff treat it as part of their pay. So it is launched with clear conditions and a view of what it costs at twice the headcount.

A benefit offered only to selected people without a clear criterion can breach equal treatment of employees and, in an audit, weaken its standing as a deductible expense. The eligibility conditions, such as length of service or position, therefore belong in a written policy, not in a verbal arrangement with the director.