We constantly talk to our clients, whether they are individuals or companies, about the different ways that exist for tax relief. They are becoming more and more limited, so today we will talk about one of the ways to pay less tax: taking out health insurance for company employees.
How does taking out this insurance benefit the company?
Recently, we saw how the number of people with health insurance in Spain continues to rise, reaching more than 20%. These are historic figures that are being surpassed year after year, partly due to the lengthening of public health waiting lists.
There is more and more talk about the social benefits that companies can offer their employees. Taking out health insurance is a highly recommendable option in this regard, because:
- Reduces absenteeism: by having quicker access to diagnostic tools and surgeries, it is proven that the company recovers the investment in this insurance.
- Increases employee loyalty and motivation
- Improves the company’s image (and, therefore, its Corporate Social Responsibility).
- The premium is 100% deductible for corporate income tax purposes.
Insurance premium payment options
When a company decides to subscribe/offer health insurance to its employees, there are several payment methods:
- The company pays 100% of the insurance cost
- The company pays a percentage and the employee pays another
- The employee pays for it in full (hired by whomever he/she wants, of course).
Let’s see how these options differ:
- When the company assumes the entire premium
As we said, everything paid by the company is deductible in the Corporate Tax, so we could say that 25% is assumed by the Treasury
Up to 500 euros per insured person per year, is not computed in the IRPF for the employee, so it is considered an alternative to the salary increase that also entails tax savings for the employee, which he/she values enormously.
- When each of the parties assumes a percentage or when the employee pays in full
In this case, the part assumed by the employee, if deducted from his or her paycheck, also provides a tax benefit, since it reduces his or her taxable income (as it is in the form of a Flexible Compensation Plan)
. The part assumed by the company has the same consideration as that stated in the previous point.
The cost of health insurance when taken out by the company
Of course, we have not mentioned that the prices that the company obtains by insuring its entire staff are much better than the prices for health insurance that could be contracted individually. Discounts of up to 40% can be obtained for the same policy by forming a group of employees.
If you want to check how much a health insurance for your company’s employees would cost, contact us without obligation. Be one of the many companies with health insurance for their employees, and start enjoying all these advantages.
