A strong remuneration package today goes beyond gross salary alone. Employees expect more flexibility, more purchasing power and transparency.
That’s why more and more companies are opting for a cafeteria plan: a practical way to tailor remuneration to individual needs, without extra costs for the employer.
But what exactly is a cafeteria plan? And how do you keep it both simple and compliant?
What is a cafeteria plan?
A cafeteria plan is a form of flexible pay where the employer sets the framework, and employees choose the benefits that suit them best.
In practice, an employee exchanges part of their existing pay package for tailored benefits. That budget can be built from, for example, the year-end bonus, gross salary above scale, extra statutory leave days, or other components provided that conversion is allowed under applicable sector and company rules.
The core idea is simple:
convert part of existing remuneration into benefits that better match an employee’s personal situation.
The goal is not only salary optimisation, it also delivers:
- more freedom of choice,
- more purchasing power,
- and stronger engagement.
Combined with increased purchasing power, this contributes to greater satisfaction in the workplace.
👉 Implement easily with RewardFlex
Why choose a cafeteria plan?
For employees
- Higher net impact: benefits are often more advantageous than cash salary
- Tailored choices: each life stage comes with different priorities
- Clarity: employees clearly see their choices and the value of the benefits they receive
For your business
- Budget-neutral: you reallocate existing salary, without additional payroll cost
- Stronger retention: freedom of choice boosts satisfaction
- Easier recruitment: a modern pay package makes the difference
- Lower charges: subject to correct application of the legal framework
It’s no coincidence that cafeteria plans are growing fast, especially among SMEs. Bike leasing, IT & multimedia, and insurance options are among the most popular choices.
Benefits in a cafeteriaplan
The different options in a cafeteria plan include:
- Bike leasing
- IT & multimedia
- Extra leave
- Pension savings
- Health insurance
How does a cafeteria plan work in practice?
You define the framework
analyse and determine:
- which pay components can be exchanged
- which extra-legal benefits are offered
Important notice:
- each benefit comes with its own tax and social security rules
- agreements must be clearly defined upfront
- transparency is essential
Employees make their choice
Participation is always voluntary. Anyone who makes no selection simply keeps their original pay package. Those who do opt in confirm their choice formally via an addendum to the employment contract.
What should you pay attention to?
A cafeteria plan needs to be attractive and compliant. Key attention points include:
- sector rules and collective labour agreements (CLAs) still apply
- minimum wages and pay scales must be respected
- the plan must be applied consistently
- employees are informed correctly so they can make a well-considered choice
Want more information?
A cafeteria plan is a strategic pillar of a strong remuneration policy. It increases engagement, strengthens your employer brand, and remains financially manageable.