Through the Tax Free Benefits module, you as an employer provide access to the yearly free space of the WKR to your employees. This enables employees to purchase benefits in the Alleo marketplace with a gross / net tax advantage from different budget sources, like gross holiday allowance or gross salary. In addition the employer enjoys a tax advantage.
Based on the available free space in the WKR, a yearly spending limit per employee is defined. Within this limit an employee can purchase both one-off benefits (vouchers) and monthly benefits (subscriptions).
Yearly limit
To ensure the available free space in the WKR for your company cannot be exceeded, a yearly limit per employee is defined. It is possible to apply a different limit for each employee. This yearly spending limit defines how much an employee can spend on benefits within the Alleo app. The available amount divided by 12 dictates the amount an employee can spend on monthly benefits. For example:
The yearly limit is set to €600, this means an employee can spend €50 on monthly benefits.
If the employee spends €100 on one off benefits, there is €500/12 = €41.66 left to spend on monthly benefits.
This monthly limit resets and is recalculated automatically on a yearly basis.
Budget Sources
The employer decides which budget sources are made available. By default the Gross holiday allowance and Gross salary are supported as budgets. At least one budget source needs to be provided.
❗Please note that the employee salary cannot fall below minimum wage (WML - Wet Minimum Loon) as a consequence of the salary exchange.
Mutations processing
Here follows a high level description of the module and the resulting mutations per employee (for a detail description on the employee experience, please see this article):
An employee purchases a benefit in the app:
The employee chooses the budget source (gross salary or gross holiday allowance). If a single budget source is available, this source is selected by default.
The employee signs an addendum confirming the gross salary deduction.
A transaction becomes available in the Alleo Portal:
Each transaction contains the Euro amount, benefit spending goal, budget source and a link to the addendum.
You can export all mutations to CSV for bulk processing purposes.
Each transaction results in a mutation which needs to be processed on the salary slip of the employee:
The transaction amount results in a gross deduction from the budget source.
The transaction amount needs to be allocated in the free space of the WKR.
Alleo invoices the employer on a monthly post paid basis.
💡 The contract addendum can be customised according to the requirements of
the employer.
Required data
In addition to the standard employee data required to create an employee in Alleo data (first name, last name, email address), the following additional data is required per employee to activate the Tax Free Benefits module:
Field | Notes |
Yearly tax free limit | Updated once per year |
Monthly gross holiday allowance | Possible budget source, this field can be updated monthly if required |
Monthly gross salary | Possible budget source, this field can be updated monthly if required |
Tax advantages
The employer provides the yearly free space of the WKR as a source for the gross/net tax advantage. Both the employer as well as the employee enjoy a tax advantage when benefits are purchased via the Tax Free module:
Employee tax advantage: the benefit purchases made by the employee are paid from the gross salary instead of the net salary, which can result into a saving on income tax of up to 49.5% over the exchanged amount. The actual saving differs per employee based on the salary and tax bracket.
Employer tax advantage: when an employee purchases a benefit from their gross salary, the salary over which the employer pays social securities and other contributions effectively reduces. This can result in a saving of approximately 18% over all purchases made by employees via the Tax Free module.
💡 Exchanging salary can have an impact for employees on the build up of holiday allowance, collective pension and other salary components.