A pay rise makes you happy, but not for long...
The effect on employee loyalty and commitment is minimal - and, above all, limited in time. It often only takes a few months for the higher salary to become the new normal. However, when it comes to salary, there are many additional benefits that you can offer your employees as an alternative to a salary increase. We have taken a closer look at ten of them.
Alternatives to the wage increase
- More vacation days (unpaid leave, etc.)
- Reduced working hours
- Flexible working hours
- Childcare and care
- Further education and training opportunities
- Workplace health promotion and fitness
- Travel allowances
- Subsidy for public transportation
- Electric car or e-bike
- Meal allowance
1. more vacation days
An additional 6th week of vacation, unpaid leave for further training or longer stays abroad, an extra day off on your birthday or the unlimited leave model can be attractive alternatives to a pay rise. Another option for temporary leave is a sabbatical.
2. reduced working hours
Reduced working hours with the same salary can be an incentive for your employees to reduce their weekly hours without reducing their work performance. More effective working is the keyword here!
3. flexible working hours
According to a Kununu study, flexible working hours are the most desired benefit at around 70%. In addition to working from home and the option to work remotely, flexitime without core working hours, trust-based working hours and 4-day weeks are also an attractive alternative to a salary increase.
4. childcare and care
As an employer, you can pay contributions for your employees' crèche, kindergarten or daycare center in addition to their salary. Annual contributions of up to €1,000 for children up to the age of 10 are tax-free. The payment of short-term care staff for relatives in need of care (up to €600) is also an option if your employees need to cover for work at the weekend.
5. further training opportunities and subsidies
You can cover the costs of further training such as workshops, masters or language courses for your (growth-oriented) employees free of tax and social security contributions in addition to their salary. However, the further training must be relevant to the employee's job or internal job change.
6. company health promotion and fitness
All benefits that improve general health are free of tax and social security contributions for employees up to €600 per year. These include fitness memberships, yoga, but also stress management courses or smoking cessation. Another option is supplementary health insurance, which you can take out for your employees.
7. travel allowances
In Austria employees who commute to work every day can apply for a travel allowance from the state's employee subsidy scheme.
In Germany you can reimburse your employees 30 cents per kilometer per working day between home and work. 15% wage tax is deducted from this amount. Social security contributions do not apply.
8. subsidy for public transportation
Employees do not have to pay taxes and social security contributions even if they receive an allowance for the use of public transportation. An annual pass for public transport or the train (e.g. the Deutsche Bahn Card or the Austrian Climate Ticket), which can be used for business and private purposes, are definitely a welcome benefit for your employees.
9. electric car or e-bike
The business and private use of an electric car, e-bike or bicycle is completely tax-free for your employees, provided the C02 emissions are zero percent. For the time being, this regulation only applies to e-bikes until 2030.
10. meal allowance
Whether it's a canteen, food vouchers or a meal allowance for going to a restaurant during your lunch break.
In Germany you can pay your employees up to €7.23 (€4.13 benefit in kind + €3.10 employer allowance) per day for lunch.
In Austria, it is up to €8 for restaurant and delivery services or €2 for food from the supermarket or bakery. More information on the rules for tax-free meal vouchers in Austria, here.
Tip: Apps such as Lunchit, givve Lunch or MyEdenred Pay are now digital alternatives to paper meal vouchers.
Other rewarding benefits
- Gifts: 186€ gifts in kind per employee and year possible.
- Company apartment: e.g. in a hotel or for commuting employees.
- Work equipment for private use: notebook, PC, cell phone, ...
- Borrowing money: up to 2,600 euros free of tax and social security contributions.
- Company car: for business and private use.
- 20 percent time: to work on additional ideas that do not (have to) have anything to do with the actual tasks.
- ...
As you can see, there are plenty of tax-free extras that are worthwhile for both sides.
Advantages of additional benefits for you as an employer
- Financial benefits due to tax deductibility
- Long-term relationship management & employee retention
- Image cultivation and increasing employer attractiveness
- Higher salary satisfaction among employees
Measurable advantages over other employers
Above all, calculative employees, who weigh up performance and consideration precisely, want to recognize and receive measurable advantages over other employers. If the framework conditions, such as salary and time management, are right, they have a solid basis for delivering full performance.
In addition, the calculative factor is the easiest for you as an employer to control.
For example, through flexible working hours, modern workplace design or benefits for special achievements.
