Flexible and voluntary benefits
This factsheet was last updated in April 2016.
What are flexible and voluntary benefits?
Flexible and voluntary benefits schemes both aim to foster employee choice by providing flexibility over individual benefits packages, but it's important to distinguish between them.
Flexible benefits schemes (also known as ‘cafeteria benefits’ or ‘flex plans’) allow employees to vary their pay and benefits package in order to satisfy their personal requirements. The dividing line between pay and benefits is less rigid than in standard reward packages. In most schemes, employees are able either to retain their existing salary while varying the mix of various benefits they receive or adjust their salary up or down by taking fewer or more benefits.
Voluntary benefits (also known as affinity benefits) allow employees to buy products and services, usually at a discount, through their employer out of their own taxable income or through a salary sacrifice arrangements. These schemes differ from flexible benefits as the employee pays for the cost of the benefits. Under voluntary benefits schemes, although the employer does not pay for the benefits provided, some costs may be incurred in time spent researching suppliers of services or in administration costs.
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- What are flexible and voluntary benefits?
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