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Saturday, June 25, 2022

Can you earn more for the same amount?

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The answer to the question titled this column is yes, in certain cases there are tools that help earn more by charging the same. In an environment like the current one, where inflation is skyrocketing, the currency is depreciating and the purchasing power of workers is falling, one has to resort to certain tools to try to earn more on the payroll, to seek some immunization against inflation .

It is a medium and long-term mechanism to maintain household economic capacity without triggering business economic costs, and also prevents a temporary inflation problem from becoming structural.

And what is the magic recipe? In economics, the fiscal instruments of legislation and economic policy usually contain certain teaching formulas that were previously only available to a few and that should be democratized: We are talking about flexible remuneration.

This formula has significant economic benefits for workers and their companies without impacting payroll costs. In general, flexible compensation allows companies to offer goods or services to their employees at a price lower than the market price, so that these costs can be counted towards the gross salary instead of the net salary. A formula that achieves important tax benefits.

This is a very opportune moment as the government has not lowered the personal income tax table and has no plans to do so until 2023, which means workers will pay more taxes over time with high inflation rates.

An example that clarifies what we are commenting on is the following: Group health insurance benefits in kind, one of the most valued employee benefits and which on many occasions help create a better work environment as a whole and build customer loyalty Internal talent. The worker is facilitated to save a percentage of the contribution equal to the marginal rate in which he is, which in certain cases exceeds 50%. And they are corporate tax-deductible expenses for companies without counting them against the employee’s income.

We are at a time when we need to provide SMEs and the self-employed with the same tools that have been available to large companies for many years to maximize profits and employee rewards and protect the purchasing power and competitiveness of Spanish companies.

A journey where you will have to find yourself a good advisor and the support of a large company that has all the tools, because yes, in certain cases it is possible to cushion this blow of inflation and earn more.

Luis Maria Saez de JaureguiVice President of the AXA Foundation.

Source elpais.com

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