The Individual Choice Budget (IKB), also known as the Personal Choice Budget (PKB) or simply the multiple-choice budget, offers employees within the collective labor agreement arrangements the flexibility to choose how they want to spend their secondary employment benefits. This can vary from taking a course to taking additional leave hours. Employees build up a budget monthly that consists of both a monetary amount and available time, giving them significant control over their work-life balance and personal development.

The IKB replaces:

• The holiday allowance of about 8%

• A year-end bonus or profit sharing

• Supplementary leave hours

• Other allowances, such as age-related hours.

Employees can decide for themselves when to have it paid out and thus make the choice every month on how they want to spend it.  

Individual Choice Budget examples

Below are some examples of what is possible with the Individual Choice Budget:

• Employees can use the IKB to purchase extra vacation days or extend existing leave hours.

• The budget can be used for training or courses to promote personal and professional development.

• Employees have the option to receive the PKB partially or fully paid out for extra financial flexibility.

• The budget can be spent on tax-advantaged options, such as participating in a corporate fitness program or purchasing a lease bike.

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Challenges of the current Individual Choice Budget

The current Individual Choice Budget allows employees to flexibly arrange their employment benefits. Nevertheless, there are some challenges that limit the effectiveness of the PKB:

• Complexity and transparency: The PKB is often complicated and not transparent enough, causing employees not to fully understand how they can use their budget. This lack of insight can lead to suboptimal use of the available options.

• Lack of flexibility: Although the PKB is designed to offer flexibility, it sometimes does not align with the individual needs of employees. This can be particularly challenging in a diverse work environment where different generations have varying desires.

• Administrative burdens: Managing and administrating the IKB can be time-consuming and costly for organizations, especially if a lot of customization is required to meet the needs of all employees.

• Restrictions of the WKR: The work-related expenses scheme (WKR) can be limiting, as certain arrangements within the IKB take up a lot of space, leaving less room for other reimbursements and provisions.

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How can Alleo make the Individual Choice Budget more flexible?

The Alleo platform offers the solution for managing, making transparent & flexible the IKB. Through a user-friendly app, employees can view their budgets and hours and spend them on a wide range of benefits, such as sports, healthy food, childcare, cycling, culture & leisure, and training. Tailored to their personal lifestyle, life stage, and unique needs. Some of the available options are:

• Gyms and vitality (more than 10,000 locations)

• Culture & leisure

• Cycling & mobility

• Green employment conditions

• Coaching, mental & financial health

• Nutrition & groceries

• Charitable donations

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All benefits at a glance

With the wide range of secondary employment benefits, you can respond to the preferences and life stages of your team. Moreover, Alleo offers even more advantages:

• Do you want to focus on reducing absenteeism, improving vitality, or other goals? Through the central app, it's easier to encourage specific goals among employees.

• Alleo integrates with multiple HR & payroll systems (such as AFAS), making administration easier. With the extensive and flexible range of employment benefits, you make yourself more attractive to employees. This way, you make your company stand out in the labor market.

• Alleo is the only billing partner.

• Optimization of the Work-related Expenses Scheme (WKR) so that more employees can benefit from it.

• Increase job satisfaction and fulfillment with a personalized benefits package.

• Through collective deals and discounts, employees benefit from an average of 17%, which increases their purchasing power.

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Did you know?

You can also easily offer employees additional employment benefits without building up a PKB. This can be done, for example, through a gross salary exchange for purchasing benefits with tax advantages or the buying and selling of leave. These methods require no budget buildup and can be implemented flexibly and quickly to meet the needs of the employees.