A LITTLE CLARITY

What is Corporate Welfare?

Corporate welfare means services, benefits and payments that a company recognises to its employees with the purpose of improving their private life and work performance.

The benefit underpinned by a good corporate welfare programme is seven times greater than the economic benefit because the company transmits attention to its people, increasing the sense of belonging to the business community.

SOURCES

Reference regulations for corporate welfare

CONSOLIDATED LAW ON INCOME TAX (TUIR)

At article 51, this law governs which income does not constitute income from subordinate employment. The company can therefore pay this income to the employees without contribution and tax burdens.

Areas of action

The world of welfare services

A group of services designed and built with the purpose of responding effectively to the needs of employees and their families.

Parenthood

Support for the education and care of children

People Caring

Personal care and care for family members

Wellbeing and health

Health services, psychological support, prevention and check-up

Culture and leisure

Promotion and enhancement of culture

Work-life balance

Support reconciliation between private and professional life

Economic support

Saving and pension
A benefit for all

Advantages for the company and the worker

Corporate welfare is the most efficient form of transferring resources between the company and its people. For the worker, welfare does not contribute to income generation and for companies having a welfare plan offers significant tax advantages.

Advantages for the company
  • Employer branding
  • Improvement of social reputation
  • Greater productivity
  • Engagement
  • Reduction of tax wedge
Advantages for the worker
  • Greater purchasing power
  • Wellbeing
  • Motivation
  • Cohesion and sense of belonging
  • Work-life balance
Obligatory measures and company regulations

Sources of funding

NCLA

Some national collective labour agreements introduce obligatory measures of corporate welfare. Among the active collective employment contracts, we find goldsmiths and jewellers, telecommunications, metalworkers.

PREFORMANCE BONUS

In the presence of specific second level business agreements, the performance bonuses can benefit from preferential taxation and be converted into welfare goods and services.