What is Flexible Benefits Plan?
A Flexible Benefits Plan (FBP) is an employee compensation strategy that allows employees to customize their salary package based on their needs and preferences. Instead of providing a fixed set of benefits, this plan gives employees the flexibility to allocate their benefits budget to options that suit their personal or professional priorities.
Key Features of a Flexible Benefits Plan:
Customization: Employees can choose benefits that align with their lifestyle and requirements, such as health insurance, travel allowances, or meal vouchers.
Tax Efficiency: The plan is designed to help employees save on taxes by choosing benefits that are eligible for tax exemptions.
Employer’s Budgeting: While employees have flexibility, employers set a cap on the amount allocated for benefits, ensuring cost control.
Employee Engagement: By providing personalized benefits, companies can improve employee satisfaction and retention.
Variety of Options: Common benefit choices include health insurance, retirement savings, childcare allowances, transport reimbursements, and wellness programs.