"Salary increase" not only sounds like more money in the bank, but also recognition of achievement. Higher gross wages are not always the best thing that can happen to employees and companies. The cold progression, the increase in the tax burden, ensures that more taxes are due on the salary – and under certain circumstances an employee has even less in his pocket after a salary increase than before.
Apart from the increased tax burden, a salary increase for smaller amounts does not particularly pay off: "If a company offers an employee a 100 euro salary increase, then the employer has to pay 120 euros and the employee only gets 50 euros," calculates Dennis Meurer by Investwerk, which advises companies on remuneration systems. 70 euros go to the state.
There are alternatives to a salary increase that pay off for both sides. So-called benefits in kind are often subject to little or no tax. In addition, they bind the employee more firmly to the company. "There are about 15 different building blocks that can be used to optimize the compensation system," says Meurer. If you combine them, you get a bundle with a decent effect. “In this way, a gross salary increase of EUR 300 also leaves EUR 300 net per month,” says Meurer.
There is the well-known company car, which is no longer so popular with younger employees. However, this does not mean that an employee has to forego advantages just because he decides against a company car. A healthy alternative is a company bike, Meurer suggests. Unlike the company car, the company bike can be used 100 percent privately without this use having to be additionally taxed. There is only a pecuniary advantage of one percent of the new price. For a bike worth 1,000 euros, ten euros must be taxed.
Donations such as smartphones or grants for them are also in fashion. Apart from a company smartphone, there are many possibilities. "An employee can lease a smartphone through the company, just like a company car," says Meurer. Of course, the company is not allowed to give the employee anything; this would otherwise be a monetary benefit for which taxes would be due. But a "lease agreement" is a way of providing the employee with new equipment at low cost.
With such a leasing contract, private use is possible without restrictions. But it also stipulates that the employee must pay for repairs, theft and more themselves, because the company itself only leases, says Meurer: "If the leasing contract expires after two years, the employee can buy the device." Usually he has to even, in total only about three percent of the original value of the cell phone is due.
"A company can also subsidize the mobile phone bill," says Meurer. The employee pays the bill himself, but receives money from his employer. However, the amount is not subject to tax or social security contributions.
Another alternative to the taxable salary increase are benefits in kind: For example, a company can give an employee 600 euros a year or 50 euros a month gross and net. "In the past, these 50 euros were often fuel vouchers because the tax office only recognized them without any problems," explains Meurer.
But the handling was complicated: The fuel vouchers could only show the liters to be filled up, but the price could not exceed 50 euros. If you filled up for one cent too much, the fuel voucher could no longer be used for this process, but only the next time. The legislature has also recognized how impractical the system was – and now allows a flat rate of 50 euros tax-free. However, the company is not allowed to pay out the amount. Anyone who has already been provided with a job ticket will get nothing: the employer's subsidy for using public transport is offset against the 50 euros per month.
For very creative companies, license plate advertising is also a way of giving the employee a few euros: simply give the employee a sticker with the company logo or advertising for a car or moped, and you can pay out 21 euros a month, explains Meurer. "A company does not have to pay any taxes for this and only has low acquisition costs for the stickers," says Meurer.
Discounts on own products for employees are tax-free up to 1,080 euros per year. However, the employer must ensure that this limit is observed so that the tax office does not become aware. To be on the safe side in general, Meurer recommends coordinating planned measures with the tax office.
Smaller companies in particular often cannot afford a canteen – which is why meal allowances are a popular and effective way of providing employees with support.
“The employer can give the employee 93 euros per month in the form of meal vouchers. This money does not necessarily have to be redeemed in a restaurant, but can also be spent in almost any supermarket.
An employer can also invest in training for their employees and not pay taxes or duties on them as long as it is clear that the training is directly applicable to the job. "But most employees focus more on the financial side when it comes to their demands," says Meurer. Therefore, further training as a substitute for a salary increase is rather unpopular.
In complete contrast to the day-care center subsidies: A company can offer to pay the employee a subsidy for the childcare costs. It is also exempt from tax and social security contributions and can relieve a family's budget. Depending on the city you live in, the benefit of the ancillary benefits can amount to up to 500 euros a month.
Health expenditures are a beneficial measure for companies and employees alike. "If certain criteria are met, an employer can spend 500 euros per year and employee to promote the health of the employee," says Meurer. Employees benefit from the yoga teacher or the back school in the company, while the employer prevents absenteeism or presenteeism. Company health management is also spreading, says Meurer.
Another effect that is also rarely used, but which can be attractive for many: "The company can take out supplementary health insurance for the employee, for example for their teeth," says Meurer. Company health insurance is an attractive service, especially for those who would otherwise no longer be able to access certain services or simply cannot afford them. "The employee can save costs in this way, and the employer retains employees," says Meurer.
Actually, such benefits, which are exclusively in addition to the salary (and not as a substitute!), are positive: "It's a win-win situation," says Meurer. Despite this, the services are often not yet used. "Especially in small or medium-sized companies, the bosses often don't even know what's possible," says Meurer. Or the effort is simply too great for them.
The alternatives to a salary increase are rarely used, and not just because of ignorance. It also has disadvantages if the salary does not increase. Unlike salary increases, the additional benefits are not reflected in the pension notice. Although the increase in pension entitlement through salary increases is minimal, Meurer objects. Nevertheless, an employee should consider whether he would like to forego these additional pension rights. "In a good concept, this difference is compensated for by a company pension scheme," says Meurer. It also binds the employee to the company, especially if the employer pays this additional benefit.
Another uncertainty regarding the additional benefits remains the fact that employers often conclude these "on top benefits" in such a way that they can be terminated at any time – after all, that is their central feature, which is why they do not act as a salary increase. This creates anxiety among employees. But Meurer can calm things down: "We have never seen a company discontinue these measures." When it comes to additional benefits, trust between employer and employee plays a major role. If the grants suddenly stop, it is because a company is in crisis and has to lay off employees.
