Flexi Benefit Pay
In India, Flexible Benefits Plan (FBP) in salary structure is a facility for employees in which they can modify components of CTC (Cost to Company) such as medical expenses and conveyance. CTC contains all the elements of salary; HRA (House Rent Allowance), Medical Expenses, Basic Salary, DA (Dearness Allowance), etc. The major objective of the Flexi Benefit Plan is to provide freedom to choose. A Flexi or Flexible Benefits plan is introduced to save tax and it includes the following components;
- Medical Expenses
- Telephone Bills
Benefits of Flexi Benefit Pay/Plan
- Tax Saving practice
- Employee Satisfaction which means more productivity
- Transparency in organization
- Effective Recruitment
Downsides Of Flexible Benefit Plan
Sometimes both the employer and employees can face the downsides of a flexible benefit plan:
Disadvantages for Employers
Difficulty in Implementation: Companies must invest a lot of time and effort in explaining their employees the benefits of the plan, and any communication can make it difficult to implement.
Setup Expenses: It takes a lot of time and effort to implement a new change in the organization. Furthermore, a new technology might be needed for implementation.
Disadvantages for Employees
Lack of Portability Options: These plans lack portability options most of the times. So, if you plan on changing jobs the plan cannot be transferred.
Possibility of Losing Money: Certain flex plans don’t let employees save the money they didn’t spent within a financial year. This most of the time leads to employees losing money.
Frequently Asked Questions
How to declare FBP?
Every organization uses their own management system to assist in declaring their FBP. When an employee wishes to declare their FBP in salary they need to visit the Employee Self-Service (ESS) Portal and declare all the benefits they have received.
Is FBP part of the CTC?
In India, FBP is a part of an employee’s CTC and this allows them to make any changes in the elements of CTC such as healthcare bills and transportation. An employee’s CTC also includes other elements like HRA, Medical Charges, Basic Income etc.
Who are eligible for FBP?
In India, all the full-time employees with a work schedule of 20 hours or more in a week are eligible for FBP.