The Benefits

Benefits in kind are goods, services, or benefits provided by the employer to the employee in addition to their salary. Unlike a salary paid in cash, they allow the employee to directly benefit from a good or service that is fully or partially paid for by the company.

1. What are the main benefits provided to employees?

Depending on company policy and the terms set forth in the employment contract, collective bargaining agreement, or applicable agreements, the employer may, among other things, cover:

• water and electricity bills;
• telephone or communication costs;
• the employee’s transportation;
• a fuel allowance;
• certain housing expenses;
• children’s school tuition;
• certain gifts given to employees;
• financial assistance for social events such as a wedding, a birth, or a death.

These benefits are generally provided in addition to the employee’s primary compensation.

2. Practical Example

Practical example

Base salary: 300,000 FCFA

The company also provides the employee with a company car, a monthly fuel allowance, and a phone with a service plan paid for by the company.

These benefits have economic value, even if they are not directly paid to the employee in the form of cash.

3. Benefits in Kind vs. Reimbursement of Expenses: What’s the Difference?

It is important to distinguish between a personal benefit granted to an employee and the simple reimbursement of an expense incurred for the company’s needs.

Practical example

An employee uses his personal vehicle to carry out a work assignment. If the company reimburses him exactly for the expenses incurred during this assignment, this is generally considered a reimbursement of business expenses.

On the other hand, if the company provides the employee with a monthly, ongoing fuel allowance that the employee can also use for personal travel, this payment may constitute a benefit granted to the employee.

How the expense is classified is important, as it can affect its treatment for social security and tax purposes.

4. Why do companies provide benefits?

Benefits are an important part of a company’s compensation policy. They can help:

• improve working conditions;
• attract new employees;
• retain employees;
• support employees with certain expenses;
• supplement compensation without necessarily having to increase the base salary alone.

However, it is recommended to clearly define the eligibility criteria for each benefit.

Key Points

A benefit in kind is a good or service provided by the employer for the employee’s benefit, in addition to their compensation.

It is important to distinguish between a personal benefit and the reimbursement of an actual business expense, as their legal, social security, and tax treatment may differ.