Flexible Remuneration

Flexible remuneration is a remuneration system that provides an alternative way of remunerating employees for their services beyond cash salary.

Each employee can choose how much of his or her flexible remuneration he or she wants to continue to receive as a monetary salary and how much he or she wants to receive in the form of services.

Flexible remuneration substitutes a cash item for an item in kind with tax exemption as a tax benefit for the employee.

The part selected by the employee to receive as remuneration in kind may never exceed 30% of the employee's total gross salary. In addition, we must ensure that the net monthly salary that the employee will receive, once the flexible remuneration has been applied, is higher than the minimum interprofessional wage.

The company will choose to present the employee with a catalogue of services that will allow him/her to make his/her remuneration more flexible according to his/her needs, thereby personalising the remuneration of each of its employees, taking into account the specific characteristics of each one.

Nowadays there are many providers and platforms with mobile APPs that work with flexible remuneration in the simplest way, adapting the flex catalogue to the business strategy. This type of tool, in addition to offering multiple possibilities to the employee, helps enormously in the management of flexible remuneration in HR departments. It is now possible to offer employees a wide range of services to help them get more out of their salary.

It should also be borne in mind that, according to the Labour Inspectorate, any flexibilised salary will be paid into the Social Security system, so for legal purposes, the contribution bases will be maintained and therefore the employee will retain the same level of unemployment, incapacity, retirement benefits....

Similarly, flexible remuneration will have no impact on the calculation of severance payments.

The communication of the voluntary nature of receiving part of the salary as flexible remuneration must be formalised in an annex to the contract or similar document.

In terms of flexible remuneration offerings, the ones most in demand by employees are:

  • External training: this should be training that is relevant to the job or career of the employee to be trained.

There is no exemption limit for this type of flexible remuneration.

  • Health insurance: private health insurance, which will usually have better prices than individual health insurance, due to economies of scale (the bargaining power for prices is usually greater for a company than for an individual).

Health insurance is exempt from taxation up to €500 per year per person (for the employee and his/her family).

  • Transport: for public transport from the home to the workplace.

They will be exempt from taxation up to €1,500 per year (spread over 11 months).

  • Childcare voucher: which helps to deduct the childcare fees of children under 3 years of age from our personal income tax withholding without exemption limit (maximum 11 months).
  • Restaurant Cheque: with exemption of up to €11 per day (up to a maximum of 11 months).

The employee still has to hire services that are indispensable to his or her daily life, but with the use of flexible remuneration, he or she can obtain a higher return than what is actually paid on the payroll.

It is also important to take into account the effects that the establishment of flexible remuneration policies have on the employees' view of their company:

- Increasing their loyalty, because 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 on 93 872 69 44 or 91.278 31 9


GM Integra HR