Flexible remuneration is a remuneration system that provides an alternative to remuneration for the employee’s services rendered, beyond the cash salary.
Each employee can choose which part of their flexible remuneration they want to continue receiving as monetary salary and which part they want to receive in the form of services.
Flexible remuneration replaces a monetary part with a part in kind with tax exemption as a fiscal benefit for the employee.
The part selected by the employee to receive as remuneration in kind may never exceed 30% of their total gross salary. In addition, we must ensure that the net monthly salary that the employee will receive, once flexible remuneration has been applied, is higher than the minimum interprofessional salary.
The company will choose to present the employee with a catalogue of services that allows them to make their remuneration more flexible according to their needs, thereby personalising the remuneration of each of their workers, taking into account the specific characteristics of each one.
Nowadays, there are multiple providers and platforms with mobile APPs that work with flexible remuneration in the simplest way, adapting the flex catalogue to the business strategy. These types of tools, in addition to offering multiple possibilities to the employee, greatly help in the management of flexible remuneration in HR departments. It is now possible to offer employees a wide range of services that help them get more out of their salary.
It must also be taken into account that, according to the Labour Inspectorate, all flexible salaries will be paid into Social Security, in this way, for legal purposes, the contribution bases will be maintained and therefore the employee will keep the same level of unemployment, disability, retirement benefits, etc.
Likewise, flexible remuneration will not have an impact on the calculation of severance pay.
The communication of the voluntary nature of receiving a part of the salary as flexible remuneration must be formalised by means of an annex to the contract or similar document.
As for the flexible remuneration offer, the most requested by employees are:
- External training: this must be training that is related to the job or career of the worker who is going to be trained.
There is no exemption limit for this type of flexible remuneration.
- Health insurance: private health insurance, which will normally have better prices than contracted individually, due to economies of scale (the ability to negotiate prices is usually greater in the case of a company than in the case of an individual person).
Health insurance is exempt from taxation up to €500 per year per person (for the employee and his/her family).
- Transport: for transfers by public transport from the home to the workplace.
They will be exempt from paying taxes up to €1,500 per year (spread over 11 months).
- Nursery voucher: which helps to deduct the payment of nursery school for children under 3 years of age from our IRPF withholding without an exemption limit (maximum 11 months)
- Restaurant voucher: with an exemption of up to €11 per day (up to a maximum of 11 months).
The employee still has to contract essential services for their day-to-day life, but with the use of flexible remuneration, they can obtain a higher return than what they actually receive from payroll.
It is also necessary to take into account the effects that the establishment of flexible remuneration policies has on the employees’ view of their company:
– Increasing their loyalty, since from HR we are adapting salary policies to each individual
– Improving the employer branding of the company, which, compared to its competitors, offers more beneficial and flexible conditions to its employees.
For more information, you can contact us at 93 872 69 44 or 91.278 31 9