The Benefits Card for Employee Perks: Functionality, Advantages, and Applications

Companies that want to offer employee perks have several options. A simple and tax-advantageous method is the use of non-cash benefits. Through non-cash benefits, companies can account for various employee offers up to an amount of 50 euros tax-free.

Using benefits cards allows companies and employees to utilize them easily. In this blog post, we explain how companies and employees can use employee perks with a benefits card and benefit from its application. Discover with us the diverse applications and advantages of this modern concept for employee perks.

Introduction: Using the Benefits Card for Employee Perks

Using a benefits card offers companies an efficient way to provide employees with tax-free non-cash benefits. Providers like Spendit or PayCenter enable employers to provide their employees with a prepaid Mastercard or VISA card, which can be used for specific purposes like a fuel voucher or a meal allowance for grocery shopping or dining out. This card works similarly to a regular credit card and allows employees to receive up to 50 euros per month tax-free. By using the benefits card, both employers and employees benefit from simplified processes and additional financial advantages.

Tax-Free Non-Cash Benefit: What Is It?

Tax-free non-cash benefits are services or perks that employees receive from their employer and are not subject to income tax and social security contributions thanks to an existing exemption limit. The current exemption limit for non-cash benefits is 50 euros. Such benefits can be varied and provided by the employer as meal vouchers, childcare subsidies, fuel vouchers, or gift cards.

How the Benefits Card Works in a Company

The benefits card functions as a practical tool for companies to grant their employees tax-free non-cash benefits. By issuing the card to the workforce, the employer allows employees to use it at participating merchants. Employees can flexibly use their credit for the agreed purposes, whether for their own mobility, fuel, or dining out. The functionality is simple: employees receive a certain amount credited to their benefits card each month and can spend this amount as they wish. This innovative solution offers an efficient way to reward employees while achieving tax advantages for both the company and the employees.

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Advantages for Employers and Employees from Using the Benefits Card

Using the benefits card offers numerous advantages for both employers and employees.

For Employers

  • Efficient management of non-cash benefits
  • Significant reduction in administrative effort
  • Tax-free issuance of up to 50 euros per month per employee
  • Attractive corporate benefits without additional costs

For Employees

  • Greater flexibility in using their non-cash benefits
  • Easy use of the benefits card
  • Increased employee satisfaction
  • Easier retention of talented professionals

Overall, the benefits card is a modern and effective solution to design employee perks in a contemporary way that meets the needs of both employers and employees.

Applications and Areas of Use for the Benefits Card for Employees

In Germany, benefits cards can be used for various tax-free non-cash benefits. The applications and areas of use include:

  • Meal Allowances: Employees can use benefits cards to pay for meals in restaurants or cafes.
  • Childcare: Employers can support employees with children by providing benefits cards for childcare services.
  • Travel Allowances: Employees can use benefits cards to cover the cost of public transportation or other travel expenses.
  • Health Services: Benefits cards can also be used for health services such as medications, medical examinations, or health courses.
  • Sports and Leisure Activities: Companies can provide benefits cards for purchasing sports equipment, gym memberships, or cultural events.
  • Training and Continuing Education Expenses: Employers can provide benefits cards for training and continuing education measures that help employees in their professional development.
  • Internet Costs for Home Office: The benefits card can also be provided for an internet allowance for the home office.
  • Gift Vouchers and Other Rewards: Companies can issue benefits cards as gifts or rewards for good performance or special occasions.

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Other Employee Benefits as Alternatives to the Benefits Card

All employees have their own ideas about what creates a strong bond with the company, and not all employees benefit equally from purpose-bound benefits cards. Those who do not take advantage of the benefits do not see any benefit for themselves, rendering the employee perk ineffective. It is worthwhile for companies to look at other employee perks as alternatives to the benefits card.

Financial Incentives through Bonuses

Many employees still define recognition through financial benefits. Profit sharing is understood in this context as an important factor for employee retention. Performance bonuses are another option for more motivation and employee satisfaction. However, companies should handle this with care and consider all employees, as it can quickly be perceived as unfairly distributed.

Credit Card for Flexible Use

A more flexible alternative to the benefits card is a credit card. This also has a fixed amount (usually within the non-cash benefit exemption limit of 50 euros), but employees can use it more flexibly and individually at partners or within the partner network. Expanding to a broader area like mobility increases the acceptance of these benefits compared to a more rigid benefits card.

Company Bicycle

A more sustainable alternative is company bicycles. This employee perk is particularly in demand for two reasons: the sustainability aspect and the fitness factor. Additionally, employees who want to purchase an e-bike can save significantly compared to a private purchase through a company bike leasing program.

Conclusion: Efficient Design of Employee Benefits with the Benefits Card

The benefits card offers an efficient solution for companies to grant tax-free non-cash benefits to employees. By using the card, employers can offer their employees flexibility and options in using their benefits. Providers of this solution enable employees to conveniently manage their non-cash benefits via an app and redeem them online, through an app, or in-store using a virtual prepaid card. This not only simplifies the process for employees but also significantly reduces the administrative effort for companies. Additionally, employees can easily access their card information and track transactions via the provider's app. The benefits card is thus a modern and practical way to effectively design employee perks while optimizing the tax advantages of non-cash benefits.

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Stefan Wendering
Stefan is a freelance author and editor at NAVIT. Previously, he worked for startups and in the mobility sphere. He is an expert in urban and sustainable mobility, employee benefits, and New Work. In addition to creating blog content, he also produces marketing materials, taglines, and website content, as well as case studies.
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