Corporate benefits & employee offers: 4 ideas for modern employee benefits 2024 Germany

Content

1. What are employee benefits?
2. Why companies offer benefits to their employees
3. Companies can support these areas of their employees' lives with benefits
4. What benefits are there for employees?
5. What can companies pay their employees tax-free?
6. 5 ideas for modern employee benefits 2023 

• Idea 1: Tax-free mobility budget above the 50 euro benefit in kind
• Idea 2: Germany ticket as a job ticket
• Idea 3: Company bike
• Idea 4: Flexible working time models

1. This is how companies choose the right employee benefits

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What are employee benefits?

Employee benefits - also called corporate benefits - are voluntary perks and offerings that employers grant their employees in addition to their salary. These employee offerings are usually part of the overall employee compensation and motivation package and are designed to promote employee satisfaction, well-being and retention.

Employee benefits vary and cover different areas of employees' lives, including health, pensions, working hours, training, food, childcare or mobility.

By offering attractive corporate benefits, employers can improve the corporate culture and employee satisfaction as well as retain current employees and convince future employees in recruiting.

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Why companies offer benefits to their employees

In addition to the employees, the companies themselves also benefit from the range of employee advantages:

• Benefits lead to a competitive advantage in the labour market
• Benefits motivate employees and make them more productive
• Benefits strengthen employee loyalty
• Benefits offer financial advantages

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Companies can support these areas of their employees' lives with benefits

There are many areas in life where companies can support their employees with benefits, offers and perks. Companies should always keep in mind the needs and wishes of their employees in order to achieve the best possible effect.

Employers can use employee surveys on benefits to find out what their employees want.

Companies can support their employees in the following areas of life:

• Health: e.g. subsidy for sports and gym memberships, fitness and health apps
• Work-life balance: e.g. flexible working hours, home office, remote work, sabbatical
• Mobility: mobility allowance, e.g. Deutschlandticket as job ticket, company bicycle, mobility budget
• Family: e.g. day care subsidy, company child care
• Further training: e.g. advanced training, coaching, language courses
• Entertainment: e.g. company events, team events, table football
• Pension provision: e.g. company pension scheme, capital-forming benefits
• Nutrition: e.g. snacks and drinks, digital meal tickets
• Finances: e.g. premiums, bonuses

What benefits are there for employees?

What all counts as corporate benefits? Basically, employee benefits are divided into non-cash and cash benefits. In addition, there are social benefits such as flexible working hours or company childcare. Companies can offer their employees these benefits:

• Benefits in kind such as job tickets for public transport, petrol vouchers or shopping vouchers
• Staff discounts, i.e. discounts on company-owned services and goods
• Company cars that can also be used privately
• Technical equipment such as smartphones, laptops or tablets - as a loan that remains company property or as a gift
• Health offers in the company or outside, e.g. through subsidies for fitness studios or sports clubs
• Meal allowances or free offers, for example in the form of snacks or fruit in the office
• Further training, seminars and coaching within or outside working hours
• Financial incentives such as Christmas and holiday bonuses, bonuses and premiums for good performance

In practice, not all of these benefits are received equally by every colleague. For older and childless employees, for example, free childcare is not interesting. An employer subsidy for a gym or sports club membership only makes sense if all sports are covered, otherwise some employees do not feel addressed. For HR managers and benefits managers, it is therefore important to find an employee benefit that is democratic and that everyone in the team can benefit from.
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What can companies pay their employees tax-free?

Regardless of the type of employee benefit, the following applies: The employer allowance is a tax-free benefit by the employer. If this employee allowance is not a direct financial payment, it is referred to as a benefit in kind. These benefits in kind, also called benefits in kind, are tax-free up to an exemption limit of 50 euros. For amounts above this, a lump-sum taxation applies to the entire amount. A benefit in kind is any benefit granted by the employer in addition to the salary:

• Credit cards
• Goods vouchers
• Mobility budget
• Gym memberships

In addition to goods and services, this also includes non-cash benefits such as a company car. If employees use it privately, this imputed income must be taxed. This also applies to S-pedelecs - e-bikes that go faster than 25 km/h - but not to other e-bikes and classic bicycles that are leased to employees as company bikes.

Gifts in kind for personal occasions, such as birthdays, weddings or the birth of a child, do not fall under the 50-euro limit and are tax-free up to a maximum of 60 euros.

These tax regulations must also be observed:

• Staff discounts on own goods or services are tax-free up to an amount of 1,080 euros per year, which corresponds to 90 euros per month.
• Job tickets and public transport allowances are tax-free for employees if they are paid in addition to their salary.
• There is no tax on the provision of technical devices such as smartphones if they remain in the company's possession. If employers give the devices to employees as gifts, they are taxed at a flat rate of 25 per cent of the value of the goods.
• Health benefits recognised by the health insurance fund can be paid tax-free by employers if they do not exceed a total value of 500 euros.
• Companies can subsidise company childcare with a maximum of 600 euros tax-free.

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4 ideas for modern employee benefits 2023

Employers have many possibilities to grant their employees allowances and support them with corporate benefits, for example. Which modern benefits are really attractive for employees?

Here are 5 ideas for modern employee benefits that companies can use to convince their employees:

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Idea 1: Tax-free mobility budget above the 50 euro benefit in kind

One of the most popular ideas for employee benefits is the 50 euro benefit in kind (Sachbezug). This allows companies to offer their employees a benefit that is completely tax-free. Particularly attractive for employees is the offer of tax-free vouchers or credit cards, which can be redeemed flexibly at various partners depending on the area of application.

One area that is particularly worthwhile for companies is employee mobility. With a mobility budget as a mobility allowance, employers can relieve their employees financially in their personal mobility and enable them to make flexible mobility offers that meet the needs and individual circumstances of the employees.

For this type of mobility allowance, employers must observe these tax regulations for remuneration in kind.

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Idea 2: Germany ticket as a job ticket

Since May 2023, Germany has the 49-Euro-Ticket, which allows unlimited use of all means of public transport throughout Germany for 49 euros per month. The Deutschlandticket also offers an attractive option for employers: the 49-Euro-Ticket can be provided tax-free and at a reduced rate as a job ticket.

This allows companies to offer the 49-euro ticket as a tax-free benefit:

• Payment in kind: The employer buys the 49-euro ticket himself and makes it available to his employees via the 50-euro payment in kind. This is particularly financially attractive for employers if they cover at least 25% of the ticket costs, because the state grants a 5% discount on the ticket price. The Deutschlandticket as a job ticket is thus at least 30% cheaper for employees and costs a maximum of 34.30 euros.

Please note: In this case, no further benefits in kind can be offered, as otherwise the exemption limit of 50 euros is exceeded.

• Settlement via the public transport allowance: Employees buy the Deutschlandticket and receive a refund from their employer via the next pay slip. In this case, the job ticket is reimbursed via the public transport allowance, which has been tax-free for employers and employees since 2019. With this variant, the 50 euro benefit in kind can also be offered tax-free.

Please note: Employees pay in advance and must submit the ticket voucher to the employer so that the employer can check the voucher for reimbursement.

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Idea 3: Company bike

Cycling not only promotes health, but also protects the environment and the climate. More and more people are therefore switching to cycling for their commute to work. E-bikes have become particularly popular in recent years, although they are not that cheap.

This is where company bike leasing becomes interesting as a benefit. Since the beginning of 2019, employers have the opportunity to provide their employees with a company bike tax-free.

Employers have the following options for the company bicycle:

1. Company bike as a salary extra: The employer buys, rents or leases the bicycle for his employees in addition to the salary. The exact distribution of costs between the employer and the employee is regulated in a transfer of use agreement. As a supplement to the salary, the company bicycle is completely tax- and social security-free for employees.
2. Company bike via salary conversion: Employees rent or lease the bicycle via salary conversion. The instalment to be paid is deducted directly from the gross salary. As with the salary, income tax and social security contributions are incurred here, but these are lower in comparison to the corresponding payroll.

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Idea 4: Flexible working time models

For years, the need for flexibility has been increasing among employees. This requires a rethink on the part of companies. In order to meet the growing demands of employees, companies can build on flexible working time models.

A survey by the job platform Remote showed that 75% of employees in Germany prefer flexible working hours to other employee benefits.

The advantage of flexible working hours: It is easier to reconcile everyday life with work. Especially employees with children benefit from this. They can arrange their working hours so that they have more time with their families.

Employers can enable flexible working hours with these modern working models:

• Trust-based working time: Working time entirely on a trust basis without fixed core working hours.
• Flexitime: Reduced core working hours with compulsory attendance plus a flexible flexitime with free choice over working hours.
• Four-day week: Same salary as for a 40-hour week for a weekly working time of 30 hours.
• Home office / remote work: Mobile workplace without a fixed office location, also called flex desk, with flexible working hours.
• Team-oriented working time: The team divides the weekly working time together, taking into account individual needs.

Unlimited leave days: Employees are free to decide on the number of annual leave days.

This is how companies choose the right employee benefits

Of course, companies cannot immediately implement all of the above ideas for modern employee benefits. For employers, it is important to weigh up individually which benefits really suit the company and its team.

This approach makes it easier for companies to decide on the right benefits for employees:

1. Needs assessment: First, employers can conduct a needs assessment to understand the needs and wants of their employees. Employee surveys or feedback sessions are suitable for this. It is important to take into account the diversity of the workforce and individual needs.
2. Budgeting: HR managers usually have a limited budget. They therefore need to weigh up the costs and benefits of potential benefits and ensure that the benefits selected provide appropriate added value for employees without having too great a financial impact on the company.
3. Flexibility and individualisation: Employees have different needs. Therefore, it is worthwhile to offer flexible benefits that meet individual preferences.
4. Communication: Employers should ensure that the selected employee benefits are communicated transparently and regularly to ensure that everyone in the team benefits from and makes use of the benefits.
5. Flexible adjustment: Even modern corporate benefits should always be reviewed. Therefore, companies should focus on flexible benefit offers that can be adapted at any time.

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Conclusion: Companies should focus on modern and flexible employee benefits

In a working world where digitalisation and skills shortages play an increasingly decisive role, companies should focus on flexible and modern benefits in order to remain attractive to talented employees. Employees increasingly value work-life balance, personal development and well-being. 

In addition, there is a greater awareness of sustainability, and many professionals find it important that their employer is sustainable. Here, modern employee benefits such as flexible working time models or sustainable mobility offers such as a mobility budget, job ticket or company bike can have a significant influence on the decision of potential employees.

An employer allowance such as modern benefits also improves employee retention and motivation. If companies offer their employees attractive benefits, they feel more valued and are more likely to commit to the company. 

This also means that employees are more satisfied, which increases their productivity and commitment to the company. This pays off for the company, as it reduces the fluctuation rate and lowers costs and resources for recruiting.

Employers who provide contemporary and customised benefits for their employees have the opportunity to increase their competitiveness and create a work atmosphere in which employees can develop their full potential. 

By addressing the current needs and expectations of the workforce, companies can build a strong and highly motivated workforce that makes a sustainable contribution to the company's long-term success.

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