Extralegal benefits: interesting from a tax and social security point of view
There are many ways to optimize the salary package of your employees and increase their purchasing power, without losing a huge chunk of your budget. This is because certain extralegal benefits are advantageous from both a social security and tax perspective. Some examples
Marriage and length-of-service bonuses
Reward your employers with a marriage or length-of-service bonus in the form of gift vouchers, a gift in kind or cash. Under certain conditions it is possible to pay no social security contribution on these bonuses.
Beware: these bonuses cannot be counted as tax-deductible expenses.
As an employer, you can give your employees preferential rates for purchasing products and services offered by your company. Under certain conditions, these discounts are exempt from tax and social security contributions. These social security benefits are non-deductible expenses which you add to your taxable income.
Do your employees use their private vehicle to travel to and from work or to get around during their working hours? Then you may be able to pay their parking costs. Either you simply reimburse them after the fact or you hire parking spaces in the name of your company and make them available to your employees free of charge. In principle, you pay no social security contribution on the parking expenses you pay back. What's more, these spendings count as a deductible expense.
Sport and culture vouchers
Want to motivate your employees whilst also contributing to their health and supporting the cultural sector? Then consider rewarding your staff with sport and culture vouchers! Under certain conditions, these vouchers are not subject to personal or corporate social security contributions. Sport and culture vouchers are exempt from taxes. Subject to strict conditions, they can be deducted as business expenses.
Another extralegal benefit that can have a great motivational effect on your employees: the company car! Your employee benefits free of charge – even for private use. The company vehicle is considered a benefit in kind – including the consequent expenses – and is subject to specific tax and social security rules.
Learn more about company vehicles.
Compensation for travel expenses
As an employer you are entitled to compensate your employees for the expenses they incur traveling to and from work. Regardless of the mode of transport – public transport, shared transport organized by your company – and for a greater amount than provided for by the law.
PC with or without internet connection
Do you already provide your employees with a free PC (desktop or laptop), with or without internet connection or subscription, for private use? This is considered a salary benefit and is not subject to social security contributions. In terms of taxes, the costs of this provision are deductible as a business expense.
Just as with a PC with or without internet connection, the free provision of a cellphone for private use is viewed as a salary benefit and is subject to personal and corporate social security contributions. For the employee, cellphones are considered benefits in kind and are a deductible business expense for the employer.
Would you like to know more about the different extralegal benefits available? To optimize the salary package of your employees without losing a big chunk of your budget? Trust the experts from Partena Professional. They'll carry out your company audit and, together with you, come up with the ideal solution!