With Alleo’s flexible benefits module, your employees get access to a wide range of perks through the Alleo benefits marketplace, including gym memberships, meal kits, childcare services and personal development.

As an employer, you provide a personal budget that employees can use to spend in this marketplace. This budget can be:

- A net contribution (an extra on top of salary), or

- Funded through a gross/net salary exchange with tax advantages for both employee and employer.

💡 Important: To enable access to subscription-based benefits (like gyms or meditation apps), a fixed monthly budget is required — starting from just £10 per employee per month.

You can offer the benefits budget in two ways: either as a net contribution or through a gross/net salary exchange. In both cases, the amount is deducted from the discretionary margin of the work-related costs scheme (WKR).

However, if you choose the exchange option, there are no additional budget costs for you as an employer. In fact, it leads to an average employer saving of 20%, as no employer social contributions are paid on the exchanged amount.

Want to learn more about the WKR or calculate your available discretionary margin? Read this article

Some benefit expenditures are exempt, such as those related to personal development. This means that these costs fall outside the work-related costs scheme and can be treated as regular business expenses. In Alleo, it is possible to offer a budget specifically for Personal Development, in addition to a general benefits budget, which can only be spent on benefits within this category.

Alleo itemizes these costs in the invoicing, making it clear what should and should not be accounted for within the WKR. This gives you full control over the WKR.

Imagine an employee signing up for a gym membership through Alleo. Firstly, employees benefit from collective discounts. A gym membership via Alleo is typically 10% cheaper than if you were to contract directly with the provider.

Additionally, the employee pays (a part of) the monthly membership costs from their budget, which is either fully covered by the employer or paid through a salary exchange. In the case of a salary exchange, the employee receives a gross/net tax advantage of 40% or more. The combination of the budget and the collective discount is therefore very advantageous for the employee. Moreover, it doesn’t have to cost you as an employer anything if salary exchange is chosen. On the contrary, it results in a 20% savings on employer costs on the exchanged salary.

You will still owe a final tax charge of 80% on the portion that is offered tax-efficiently outside the WKR. However, if you offer this through a salary exchange, you can still save 18% on social security contributions, so you actually end up paying only 62% in final tax.