Would you like to offer employees flexible benefits, but is there not enough budget within your company to get this off the ground? By exchanging existing wage components, you can reward your employees in a cost-neutral manner.

For employers who have no budget but do have room in the working cost scheme (WKR), you have the option to let salary and other wage components be exchanged tax efficiently within the WKR. This way, your employees with a gross wage component qualify for tax benefits. Does this sound interesting? Read on. We will explain exactly how it works.

Exchanging existing wage components

Instead of incurring new costs to finance additional budget, employees can exchange gross wage components. These wage components can be made flexible through cost-neutral exchange. This has a great advantage for you as an employer: you do not have to pay employer contributions on them (and the employee no tax).

Wage components that can be exchanged include:

• Salary;

• Bonuses;

• Profit sharing;

• Holiday pay.

Gross-net tax advantages

For you as an employer, there are no extra costs involved in having employees exchange wage components. In fact, exchanging gross wage components results in a gross-net tax advantage for both the employee and the employer. Because employees exchange gross wage components, the wage that is paid out decreases. This also reduces the contributions on the wage. However, you must transfer the costs to the free space of the WKR.

What can you exchange in a cost-neutral manner?

• Buying a bike;

• Taking out a sports subscription;

• Costs for childcare;

• Booking a coaching session.

The advantages of exchanging explained

Using flexible salary components ensures that you do not incur costs to make additional budget available. In fact, for every euro spent, you save 18%. Here's how it works: by allocating gross amounts, the gross salary is reduced. Consequently, the social contributions (averaging 18%) that you pay on the gross salary are also decreased.

Advantages for employers

• Cost-neutral: You save on social contributions and it costs you nothing extra.

• Flexibility: Space in the WKR is optimally utilized.

• Employee retention: Increase satisfaction and retention of employees.

Advantages for employees

• Tax Benefits: No income tax on exchanged amounts.

• Freedom of Choice: The employee enjoys more freedom in choosing secondary employment conditions.

An example of cost-neutral rewarding

Let's say an employee, 'Sabine', wants to exchange €400 of her holiday pay to buy a bike. Sabine exchanges this €400 within the WKR, reducing her holiday pay balance by €400. As an employer, you need to ensure that this €400 is transferred to the free space of the WKR. Since the €400 in holiday pay no longer counts as wages but is indicated under the free space, you no longer pay social contributions (18%) on it. With 100 employees doing this, you as an employer save €7200.

The result for Sabine?

She pays no income tax on the €400. The income tax is at least 37.5% and can rise to 52%, depending on her tax bracket. The €400 gross becomes €400 net.

Exchanging wage components in the Alleo app

Wage components can also be exchanged using budget in the Alleo app. Alleo is a platform for benefits. Employees can purchase benefits in the app with a monthly budget. In most cases, an employer frees up money and this is placed under the free space of the WKR, thereby avoiding tax on the budget.

Let's take the scenario where Sabine puts €400 of holiday pay in the Alleo app to buy a new Veloretti bike. By putting this amount in Alleo, she does not pay income tax on it. For you as an employer, this reduces the social contributions you pay on the gross salary.

Moreover, employees benefit from discounts within the Alleo app. On the platform, every euro is worth an average of €1.22. This benefit is in addition to the aforementioned tax advantage.

The benefits of Alleo

• Freedom of Choice: our app has an offer with more than 250 partners, allowing employees to make choices that really suit them.

• Flexibility: Employees can use their budgets (holiday pay, bonuses, salaries, mobility budgets, etc.) flexibly, leading to higher satisfaction and engagement.

• Relevance: The secondary benefits are tailored to different life phases and interests, contributing to higher usage of the package.

• Financial Benefits: Use the WKR scheme and exchange budgets to benefit from an exclusive collective advantage of an average of 20% through our platform. As a result, employees have an average of 40% advantage.

Contact us!

Do you want to reward your employees without it costing you extra money? Contact our benefits experts. Discuss the ideal benefits package for your company and how it can be paid for from gross wage components.