In a labour market in flux, employee empowerment remains a key focus, especially when it comes to their pay. As many as 70% of employees say they would like to take advantage of a customised compensation plan if their employer offered it. This allows them to compile a pay package that best suits their individual needs and desires. And as an employer, you have a lot to gain too: it's cost-neutral, and you get more productive and engaged employees in return.
With a cafeteria plan, you meet these requirements and needs. It also has a motivating and attractive effect: you keep motivated employees on board, and as an employer, you become more attractive to new talent.
What do you offer?
Are you thinking about implementing a cafeteria plan, or is your periodic decision time in an ongoing cafeteria plan approaching? The following choices are then among the possibilities.
Four benefit categories of can often be offered:
Mobility: e.g. an (electric) company bicycle, company car or a car or bicycle sharing scheme.
Health and additional social benefits: e.g., medical insurance or reimbursement of individual retirement savings.
Multimedia: e.g., a smartphone, tablet, or laptop.
Work-life balance: e.g. extra-legal vacations, sports facilities, childcare or ironing service.
Some advantages under the microscope
As an employer, you can play an important role in achieving climate goals. You can play that role in your cafeteria plan by offering sustainable and climate-friendly benefits, such as electric bicycles, cars and/or charging infrastructure for the employee's home.
Daarnaast blijft het medewerkers bezighouden of ze voldoende inkomen tijdens hun pensioen gaan overhouden. Een manier om hieraan tegemoet te komen is de terugbetaling van het individueel pensioensparen door je medewerker. Houd er wel rekening mee dat je de terugbetaling moet beperken tot wat je medewerker zelf heeft gestort, wil je genieten van het gunstige RSZ-regime. Bovendien is deze terugbetaling niet vrij van belastingen en moet je er dus de bedrijfsvoorheffing op inhouden. Heeft je medewerker 990 euro gestort (inkomstenjaar 2022),dan moet je dus eerst bedrijfsvoorheffing inhouden op dat bedrag.
Als je de terugbetaling van 990 euro aan de medewerker toch netto wil garanderen, dan moet je dat bedrag verhogen met de toepasselijke bedrijfsvoorheffing (het zogenaamde ‘bruteren’). Hou er dan wel rekening mee dat je dan geen beroep meer kan doen op de gunstige RSZ-behandeling. Volgens de RSZ is dan het hele bedrag van de terugbetaling (het gebruteerde bedrag) aan RSZ onderworpen.
In addition, employees continue to be concerned about whether they are going to have sufficient income once they retire. One way to address this, is to reimburse individual retirement savings paid by your employee. Keep in mind, however, that you must limit the reimbursement to what your employee has paid themselves if you want to enjoy the favourable NSSO scheme. In addition, this reimbursement is not tax-free, so you have to deduct the withholding tax from it. If your employee has deposited 990 euros (income year 2022),then you must first deduct withholding tax on that amount.
If you still want to guarantee the reimbursement of 990 euros to the employee on a net basis, then you must increase that amount by the applicable withholding tax (called "grossing up"). Keep in mind that you will then no longer be able to claim the favourable NSSO treatment. According to the NSSO, the entire amount of the refund (the grossed up amount) is then subject to NSSO.
What does it cost me as an employer?
Your employees' wages increase in value, without an increase in your payroll costs. In short: a smart and sympathetic investment that meets the individual needs of your employees, and it is budget-neutral for you as an employer.
In most cases, these are the pay elements that are eligible for the cafeteria plan along budget lines:
For whom, and how much?
Each employee is free to enter the cafeteria plan or not. You can differentiate between the budget and the benefits to be chosen based on the salary and the position. You can start small with a few choices that you expand afterwards, or you can offer a wider menu of choices right away. You can also tailor the number of decision moments to your vision and operation of your business.
Out of the starting blocks
Implementing a cafeteria plan starts with understanding the wants and needs of your employees. Good agreements and clear communication, including with the providers of these benefits, are important. This also applies to the correct legal and administrative implementation. Acerta guides and takes care of you from A to Z.
What are SMEs' greatest HR challenges today? Acerta, ETION and VKW Limburg asked 500 Belgian SMEs. What turns out to be the case? Not attracting but retaining employees is number one on the list of hr challenges for the second half of 2022. How do SMEs plan to keep their employees committed to their organisation? You can read about it in this blog.