What can you do as an employer?
If you are reading this as an employer, you may be thinking that the best way to merit a fellow colleague for good performance is to simply increase their net salary. Although this does at first seem like the obvious measure, the devil is in the detail here. In Germany at least, raising your colleague’s net salary will result in tax-deductible fees. Therefore, your colleague’s 50 Euro net salary increase per month will tend to result in duties of around at least two times as much for the employer. However, there is no reason to fear and throw away money: In this blog post, we briefly provide some considerable alternatives to salary increases - some that even result in secondary benefits for the team as a whole.
Public Transport Subsidies (Fahrtkostenzuschüsse)
One clever way of providing an alternative to an increase of income are public transport subsidies. Nowadays it is more common than not that we rely on public transport to do our walking for us, be it a metro, bus, tram or even ferry service to get to work in the first place. This is of course hugely beneficial for the employer and there are possibilities to subsidize tickets for their staff. For instance, a scheme is being introduced in Berlin for companies to provide their staff with transport subsidies. It renders the new “Jobticket” at a price for less than 50 euros a month, but it will only be valid if the employer actually contributes. However complicated the details are, this option will become more viable in growing cities.
Food subsidies have traditionally been and are an ever popular way of rewarding your employees. As we have stated in a previous blog post, employers in Germany at least have the option of providing their staff with food subsidies, meaning Essenszuschuss in German, as well as an additional tax advantage for meals as part of the work benefits in kind, known as “Sachbezüge”. To summarize this typically complicated German bureaucracy labyrinth, if the employer were to offer both food subsidy and the meal tax advantage, tax-free lunches at work would amount to a sum of 6.40 Euros per employee and day if an employee buys lunch which costs 3.30 Euros or less. You can delve more into this bureaucratic world here.
Don’t worry too much if this seems like an attack on the senses, it essentially means employees are given the option of having to pay less for lunches if subsidized by the employer, were they to use a service such as Smunch. This isn’t to mention the benefits delicious team lunches bring the company as a whole.
Health benefits: Subsidized fitness memberships
Much like the case of food subsidies having the potential to bring teams closer together through shared team lunches as a knock-on effect, subsidies for gym- or general sport memberships are also a benefit worth exploring. Not only is sport a great way to keep fit, it is also good for maintaining a positive mindset, staying motivated and keeping sickness at bay, all thanks to naturally produced endorphins. Therefore, it may well be worth considering this option to encourage staff to stay active at a more convenient price - which can also lead to increased work performance and less sick days.
Aside from a subsidy of some sort, the valid salary increase alternative of supporting your colleague’s work-life-balance and offering more days of holiday is always on the table. There is a growing desire for an improved work-life-balance these days and some studies even suggest that some employees would in fact prefer to compromise their income slightly if it meant they had more days off to enjoy life’s pleasures. Employers should keep in mind however that a minimum of 20 days holiday per year must be offered to an employee in Germany at least, permitted they work on a full-time Monday to Friday basis.
In addition to an enhanced work-life-balance, companies also have the option to offer more flexible working hours. As mentioned above, there is a growing demand to blur the boundaries between life and work - flexible working hours are definitely relevant in this regard. For example, some companies allow their staff to come in as early as six in the morning and leave at two in the afternoon, leaving the entire afternoon free for your employees. We recognize however this may only be valid for certain departments - customer service for example may need to be excused. To measure this, the trust system can also be used, with no fingerprint scanner needed.
Improved Equipment at Work
Another alternative to a salary increase would be the option to provide staff with better resources to fulfill their objectives. This can take various forms, from something as simple as improving the surrounding including desk decoration, such as a plant or a lamp to a more powerful computer or laptop, phone or another screen. Don’t let this guide limit you with your range of ideas however - it is ultimately up to employer and employee-alike.
Other ideas as alternatives to a salary increase
Although we have outlined what we feel are strong salary increase alternatives, we recognize that there are a whole range of other equally valid benefits. Further ideas that make up alternatives a raise could be:
- Further vocational training
- A company car
- A wider range and more frequent team events
- Reduced working hours
- More opportunities for home office
Extra salary or a benefit?
We at Smunch hope you have gained a greater insight into how you can further satisfy your employees and save money in the meantime. You can learn more about specifications to subsidies as well as their tax implications on our website.
Your Smunch Team