Especially in times of inflation and an economically tense situation, alternatives to a salary increase in the form of (tax-free) employer subsidies and corporate benefits are an important topic for employers. Inflation is a financial burden for many companies, but at the same time the demands of employees are also increasing. Not least due to established hybrid working models and the prevailing shortage of skilled labour in many sectors.
For small or young companies in particular, a salary increase can represent a significant financial burden. This makes financially or fiscally attractive alternatives an effective means of increasing employee satisfaction without significantly increasing labour costs. In addition, individual additional benefits enable companies to differentiate their overall employee benefits package and to optimally position and stand out in the competition for skilled labour and talent.
Corporate benefits, employer subsidies and other employee benefits have many advantages over a traditional salary increase. These are the advantages of the alternatives for employers and employees:
Alternatives to a salary increase: advantages for employers
Alternatives to a salary increase: advantages for employees
At management level, a company car is often still offered as an incentive. However, it is much more modern and democratic for companies to offer their employees alternatives. This includes the mobility budget, for example. Some DAX companies, SMEs and start-ups, such as SAP or the Lufthansa Innovation Hub, are leading the way and replacing the status symbol of the past with multimodal mobility. This means that employees can choose how they want to get to the office each day. Options include leased e-bikes, car sharing and other shared mobility, a job ticket, but also a petrol or charging card for their private car. This allows companies to optimally cater to employees' wishes for more flexibility and sustainability.
The Deutschlandticket is also well received by German companies. Half of all DAX-listed companies already offer their employees the 49-euro ticket as a job ticket. According to the Association of German Transport Companies (VDV), around 15 per cent of the approximately 10 million Deutschlandabos sold to date are job tickets. The current good news for companies: The price of the Deutschlandticket will remain at 49 euros in 2024. This means that the number of companies offering their employees a Deutschlandticket will continue to increase. Thanks to government subsidies, employees can even get it at a lower price.
Providing a tax-free travel allowance can have a number of benefits not only for employees, but also for employers. Firstly, it can increase the attractiveness of the company as an employer. Employees appreciate employers who take care of their financial relief and well-being. With a tax-free travel allowance, employers even have the opportunity to reduce non-wage labour costs and at the same time demonstrate their social responsibility with regard to environmentally friendly mobility. Last but not least, it helps companies to encourage employees to return to the office regularly with an attractive incentive.
The company bike is one of the most sustainable employee benefits and has become increasingly popular in recent years, not least thanks to the e-bike boom. This is because many people want to get around more ecologically and healthily. Employees usually receive a company bike or e-bike via a company bike lease through their employer. The employer bears the leasing costs and insurance fees for the company bike. A whole range of companies now offer leasing bikes. A comprehensive comparison of company bike providers is worthwhile in order to find the right offer or provider for you.
Employers have the option of granting their employees an annual subsidy of 600 euros for health-promoting measures free of (wage) tax. Health-promoting offers, for example from health insurance companies or private providers, can be, for example, nutritional offers such as nutrition courses or advice, courses on relaxation or stress management, exercise programmes such as back training or walking or addiction prevention such as smoking cessation or alcohol withdrawal. A subsidised membership with Urban Sports Club is particularly popular with employees, giving them flexible access to a wide range of sports and fitness activities so that they are not restricted to a single gym.
The meal allowance is an employee benefit that employers can use to financially support their employees' meals. Companies can currently grant a subsidy totalling 6.90 euros per meal. Without taking holidays, illness or public holidays into account, a lump sum of 15 meals, i.e. €103.50 per month, can be granted. This can take the form of food vouchers or meal vouchers. Employees receive a monthly allowance for their grocery shopping and visits to restaurants and cafés at their place of work. In addition to providing a food allowance, companies can also provide drinks, fresh fruit and nutritious snacks directly at the workplace.
An attractive alternative to a salary increase for employees with children is the daycare centre allowance. Employers can reimburse monthly costs incurred for the care, accommodation and meals of employees' children in full, free of tax and social security contributions, with no upper limit. The only requirement is proof of the actual costs incurred based on the original contract with the daycare centre.
Many employees do not necessarily want more pay, but would like to have much more time off. For many people, an average of 28 days holiday per year is not enough, so additional days of holiday are welcome. Companies such as Deutsche Bahn are desperately looking for new staff to bring the mobility turnaround to the railways. To this end, Deutsche Bahn offers applicants and employees up to 42 days' holiday per year. It also regularly lets its employees decide whether they want more money or more time off in future.
In addition to work, there is often not enough time for family, friends, hobbies or sport. As an alternative to additional days of holiday, companies can compress the working week so that employees have more time for private commitments. The four-day week in particular promises less work for the same salary. A compressed working week has the major advantage that employees have to work fewer days a week and still receive the same salary. For example, employees can get a long weekend. This increases employee satisfaction and also has a positive impact on productivity. This is because employees are more rested thanks to a longer weekend and can therefore work with greater concentration.
Another alternative to a salary increase that pays off for both companies and employees is professional and/or personal development. Employers can, for example, not only offer regular internal training opportunities, but also have the option of covering the costs of external training. In the end, it is not only the employees who benefit from the skills and knowledge acquired: Companies get more motivated and productive employees who are also better able to contribute to the company and thus generate more added value.
Various gift vouchers give employees the opportunity to treat themselves to something nice in their free time. Employers can grant vouchers for popular online shops that offer a wide range of products or gift vouchers that are customised to the needs and interests of employees. Vouchers for bookshops, wellness centres or travel are popular with employees, for example.
Discounts on company products and services can also be an alternative to a salary increase. For the company, this means that its own employees become customers or consumers of its own products and services. On the one hand, this has the effect that the employees identify more strongly with the company and, on the other hand, the advantage that the employees can directly improve the products through their feedback and can also sell them better through their own user experience.
Every employee is actually happy about a salary increase. However, employers are not always willing to pay out more, especially in difficult economic times. On the other hand, a salary increase is not always the most rewarding way for employees to increase their net pay. Many alternatives to a salary increase and corporate benefits mean a significant net salary optimisation for employees, which can be better than a traditional salary increase, as this has to be taxed. Many corporate benefits can be utilised tax-free or tax-reduced.
Especially in times of inflation and an economically tense situation, alternatives to a salary increase in the form of (tax-free) employer subsidies and corporate benefits are an important topic for employers. Inflation is a financial burden for many companies, but at the same time the demands of employees are also increasing. Not least due to established hybrid working models and the prevailing shortage of skilled labour in many sectors.
For small or young companies in particular, a salary increase can represent a significant financial burden. This makes financially or fiscally attractive alternatives an effective means of increasing employee satisfaction without significantly increasing labour costs. In addition, individual additional benefits enable companies to differentiate their overall employee benefits package and to optimally position and stand out in the competition for skilled labour and talent.
Corporate benefits, employer subsidies and other employee benefits have many advantages over a traditional salary increase. These are the advantages of the alternatives for employers and employees:
Alternatives to a salary increase: advantages for employers
Alternatives to a salary increase: advantages for employees
At management level, a company car is often still offered as an incentive. However, it is much more modern and democratic for companies to offer their employees alternatives. This includes the mobility budget, for example. Some DAX companies, SMEs and start-ups, such as SAP or the Lufthansa Innovation Hub, are leading the way and replacing the status symbol of the past with multimodal mobility. This means that employees can choose how they want to get to the office each day. Options include leased e-bikes, car sharing and other shared mobility, a job ticket, but also a petrol or charging card for their private car. This allows companies to optimally cater to employees' wishes for more flexibility and sustainability.
The Deutschlandticket is also well received by German companies. Half of all DAX-listed companies already offer their employees the 49-euro ticket as a job ticket. According to the Association of German Transport Companies (VDV), around 15 per cent of the approximately 10 million Deutschlandabos sold to date are job tickets. The current good news for companies: The price of the Deutschlandticket will remain at 49 euros in 2024. This means that the number of companies offering their employees a Deutschlandticket will continue to increase. Thanks to government subsidies, employees can even get it at a lower price.
Providing a tax-free travel allowance can have a number of benefits not only for employees, but also for employers. Firstly, it can increase the attractiveness of the company as an employer. Employees appreciate employers who take care of their financial relief and well-being. With a tax-free travel allowance, employers even have the opportunity to reduce non-wage labour costs and at the same time demonstrate their social responsibility with regard to environmentally friendly mobility. Last but not least, it helps companies to encourage employees to return to the office regularly with an attractive incentive.
The company bike is one of the most sustainable employee benefits and has become increasingly popular in recent years, not least thanks to the e-bike boom. This is because many people want to get around more ecologically and healthily. Employees usually receive a company bike or e-bike via a company bike lease through their employer. The employer bears the leasing costs and insurance fees for the company bike. A whole range of companies now offer leasing bikes. A comprehensive comparison of company bike providers is worthwhile in order to find the right offer or provider for you.
Employers have the option of granting their employees an annual subsidy of 600 euros for health-promoting measures free of (wage) tax. Health-promoting offers, for example from health insurance companies or private providers, can be, for example, nutritional offers such as nutrition courses or advice, courses on relaxation or stress management, exercise programmes such as back training or walking or addiction prevention such as smoking cessation or alcohol withdrawal. A subsidised membership with Urban Sports Club is particularly popular with employees, giving them flexible access to a wide range of sports and fitness activities so that they are not restricted to a single gym.
The meal allowance is an employee benefit that employers can use to financially support their employees' meals. Companies can currently grant a subsidy totalling 6.90 euros per meal. Without taking holidays, illness or public holidays into account, a lump sum of 15 meals, i.e. €103.50 per month, can be granted. This can take the form of food vouchers or meal vouchers. Employees receive a monthly allowance for their grocery shopping and visits to restaurants and cafés at their place of work. In addition to providing a food allowance, companies can also provide drinks, fresh fruit and nutritious snacks directly at the workplace.
An attractive alternative to a salary increase for employees with children is the daycare centre allowance. Employers can reimburse monthly costs incurred for the care, accommodation and meals of employees' children in full, free of tax and social security contributions, with no upper limit. The only requirement is proof of the actual costs incurred based on the original contract with the daycare centre.
Many employees do not necessarily want more pay, but would like to have much more time off. For many people, an average of 28 days holiday per year is not enough, so additional days of holiday are welcome. Companies such as Deutsche Bahn are desperately looking for new staff to bring the mobility turnaround to the railways. To this end, Deutsche Bahn offers applicants and employees up to 42 days' holiday per year. It also regularly lets its employees decide whether they want more money or more time off in future.
In addition to work, there is often not enough time for family, friends, hobbies or sport. As an alternative to additional days of holiday, companies can compress the working week so that employees have more time for private commitments. The four-day week in particular promises less work for the same salary. A compressed working week has the major advantage that employees have to work fewer days a week and still receive the same salary. For example, employees can get a long weekend. This increases employee satisfaction and also has a positive impact on productivity. This is because employees are more rested thanks to a longer weekend and can therefore work with greater concentration.
Another alternative to a salary increase that pays off for both companies and employees is professional and/or personal development. Employers can, for example, not only offer regular internal training opportunities, but also have the option of covering the costs of external training. In the end, it is not only the employees who benefit from the skills and knowledge acquired: Companies get more motivated and productive employees who are also better able to contribute to the company and thus generate more added value.
Various gift vouchers give employees the opportunity to treat themselves to something nice in their free time. Employers can grant vouchers for popular online shops that offer a wide range of products or gift vouchers that are customised to the needs and interests of employees. Vouchers for bookshops, wellness centres or travel are popular with employees, for example.
Discounts on company products and services can also be an alternative to a salary increase. For the company, this means that its own employees become customers or consumers of its own products and services. On the one hand, this has the effect that the employees identify more strongly with the company and, on the other hand, the advantage that the employees can directly improve the products through their feedback and can also sell them better through their own user experience.
Every employee is actually happy about a salary increase. However, employers are not always willing to pay out more, especially in difficult economic times. On the other hand, a salary increase is not always the most rewarding way for employees to increase their net pay. Many alternatives to a salary increase and corporate benefits mean a significant net salary optimisation for employees, which can be better than a traditional salary increase, as this has to be taxed. Many corporate benefits can be utilised tax-free or tax-reduced.