How to become attractive to employees with top performance

Do you want to retain good employees in your company and attract new, qualified specialists? Fair pay is a must, but a salary increase isn't always the ideal solution for your employees and you as an employer.

Only a small amount of it reaches the employees, while the state is happy with the tax revenue. Cash benefits can be much more attractive, as they mean less tax and go directly to the employees. The range of possibilities is wide.

Wide selection of additional services

There are a variety of additional benefits you can offer your employees:

– Company pension provision with pension fund, direct insurance or pension fund.
– travel expenses allowance.
– Low-interest employer loans.
– Childcare options.
– Further training opportunities.
– Corporate health promotion.

There are many other options for additional benefits. If you take various criteria into account, you as an employer and your employees will benefit from tax advantages.

Which additional services you offer also depends on the size of your company and its financial situation.

Company pension scheme as a classic

Company pension schemes are popular with employees because the statutory pension is becoming increasingly smaller and can therefore be used to improve the pension. It is particularly useful for employees with a low income.

You can finance the company pension plan entirely yourself, but employees can also cover part of it themselvesIn the case of direct insurance, pension funds or pension funds, up to 6.816 euros per employee per year are exempt from income tax.

Bind employees to the company with the employer loan

For an employer loan with a lower than market interest rate the interest advantage is taxable by the employees as a benefit in kindInterest savings of up to 2.600 euros are tax-free.

An employer loan is particularly beneficial for those employees who have difficulty obtaining a bank loan because they have a low income or already have a loan.

Corporate health promotion as an advantage

Company health care is tax-free if it does not exceed 600 euros per employee per year. However, the offers must be recognized as worthy of funding by a health insurance company.

Stress management seminars, healthy diets, smoking cessation courses or relaxation programs are all well suited.

Additional benefits from which employers and employees benefit equally

The range of additional benefits for employees is significantly larger in large companies than in small and medium-sized enterprises (SMEs).

Nevertheless, even with an SME, you can offer your employees additional benefits that benefit both sides. The advantage does not always have to be tax savings.

company car as a leased object

A company car is popular if you can lease it on favorable terms. You can take advantage of tax benefits with the leasing rates. This also applies for the increasingly popular electric vehicles.

Alternatively, you can offer your employees a company bicycle or grant them a favorable loan for a bicycle.

credit card bonus

Less well-known is a credit card bonus that can be granted to each employee of up to 10.000 euros per year. This is subject to a one-off tax of 30 percent. Social security contributions are significantly lower than for a salary increase.

The employees decide for themselves what they use the money for.

What is more advantageous: a salary increase or additional benefits?

Every employee is happy about a fair salary and a pay rise. In the worst case scenario, the bottom line is that the employee will end up with even less than before, as they may have to pay more taxes.

For both you and the employee, a salary increase is associated with higher taxes and social security contributions. The situation is different with additional benefits, where 200 euros often means 200 euros net if no taxes and social security contributions are incurred.

With additional benefits such as a company pension plan, benefits in kind such as subsidies for a fitness program or a travel allowance, you can bind employees to your company in the long term. This can also be achieved in a smaller company.

However, this does not mean that you do not have to offer your employees an attractive salary. If you want to attract new employees, you can point out attractive social benefits in the job advertisement.

© Photos: Austin Distel, Unsplash