he world of employee benefits as a part of compensation beyond salary can be confusing and overwhelming. We’re here to break it down for you and to help you understand how you can make the most of what you have while offering your people more options — which are evidently most likely to fit the individual needs of those that make up your varied team.
There’s a stigma around offering benefits. They are seen as something that larger companies, with proper HR teams and budgets, can afford to give their people, and something that smaller businesses wouldn’t be able to manage for a myriad of reasons.
And although going without benefits may boost your bottom line in the short run, that penny-wise philosophy could strangle your business's chances for long-term prosperity.
Considering the evidence stacked in favour of offering more options and value in the form of compensation packages which include employee benefits, it seems counterintuitive to realize that these are not the norm. And that is because benefits offers and their management have some clear problems:
Giving more options beyond the traditional and straightforward ones (health insurance, a card for spending meal allowance) is complicated
- Managers need to seek out an individual provider for each option, negotiate amounts and manage the provider, which drags out the process and makes it a fairly bureaucratic one, or manage ad hoc reimbursement requests from employees;
- Unless we’re talking about large corporations, most companies don’t have the human resources or time to spend on these issues.
People are in the dark
- Lack of clear information regarding compensation means that most people don’t understand that it could be different with more options beyond salary, and that companies could be exploring these options to reduce costs and optimise their value;
- Whenever a benefits program is offered by a company, the communication around it is often lacking or confusing, resulting in a lot of people who don’t even know what they have access to or simply aren’t taking advantage for a number of other reasons.
Processes are outdated and rarely simple or digital
- If it is going to take 10 steps, countless phone-calls, emails, paper contracts and 3 weeks between starting to issue a voucher and actually going through with it, are your employees going to even try?
- Being able to track spending and account activity and buy online are things that shouldn’t even be considered extras in this day and age.
A combination of these factors creates a sub-optimal situation for any company trying to understand, award and manage benefits for their people. But there is a lot to be gained by creating a process to offer one or many of these options through an improved process.
Let’s start by defining what these benefits are, how they are enjoyed and why any company should be offering them. Let’s get down to the nitty gritty:
Childcare voucher
What is it?
It is the benefit that allows you to pay for your child’s (<7 years old) school and other education expenses — be it a nursery and/or kindergarten, regardless of being public, private or semi-publicly owned.
Where and how can an employee use it?
In any school that has partnered with a childcare voucher provider, keeping in mind that it is only applicable to dependents under the age of 7.
You can check out the Coverflex Childcare network here, as well as more information on our groundbreaking process for creating childcare vouchers.
Why is it worth it for both company and employee?
This benefit has a 40% IRC tax mark up for the company and total exemption of Single Social Tax (TSU).
This benefit also has total tax exemption (IRS and TSU) for employees.
School Voucher
What is it?
This benefit helps you keep supporting your family by allowing you to pay for education expenses, such as schools, educational establishments and other education services for your child, 7 years old or older.
Where and how can an employee use it?
You can use it by swiping your card at libraries, schools, education centres, universities and bookstores with a POS included in the VISA Network.
Why is it worth it for both company and employee?
This benefit has SS/TSU exemption for both company and employee.
Education & Training
What is it?
This benefit allows you to pay for any expenses with regards to education, either on your behalf or on your family’s behalf.
Where and how can an employee use it?
You can use your card to pay for expenses in libraries, professional training books in specialised stores, universities, etc., wherever there is a POS that’s part of the VISA Network. You can also use it online.
Why is it worth it for both company and employee?
This benefit has SS/TSU exemption for both company and employee.
Health & wellbeing
What is it?
This benefit allows you to pay for a wide range of medical expenses, either on your behalf or on your family’s behalf. This means all kinds of appointments and medication, for example.
Where and how can an employee use it?
Swipe your card at pharmacies, hospitals, health clinics, meditation and health apps, and the like — provided they have a POS and are part of the VISA network. You can also pay for online services.
Why is it worth it for both company and employee?
This benefit has SS/TSU exemption for both company and employee.
Gym & Fitness
What is it?
It is the benefit that allows you to pay for your monthly subscription at the gym and for fitness classes online and offline at your local sports or health club.
Where and how can an employee use it?
You can use it through the card at gyms, fitness centres, fitness apps, etc., that have a POS and are within the VISA Network.
Why is it worth it for both company and employee?
This benefit has SS/TSU exemption for both company and employee.
Senior expenses
What is it?
It is the benefit that allows you to pay for daycare, nursing homes, social support establishments, and other expenses, for example with medical professionals and medication assistance, for your family members who qualify as senior citizens.
Where and how can an employee use it?
This benefit can be enjoyed by paying with the card at daycare centres, senior residencies, and the like, wherever there is a POS that’s part of the VISA Network.
Why is it worth it for both company and employee?
This benefit has SS/TSU exemption for both company and employee.
Considering the wide variety of options available for companies to help their people find something that is relevant to their particular needs of the moment, especially when looking at the most diverse workforce the world has ever seen, it’s easy to understand how creating policies that can give employees access to all of them — in a model that, instead of paying per option and use, is charged per employee — can be beneficial for employee wellbeing and the company’s financial health. Even going with just one option can be a source of savings for the company and of added value for the employee.
A simple way to understand and check out company savings and employee earnings is by playing around with our company and employee calculators.
Want to know more? Schedule a demo with our team.
