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ADD: your number one provider of option and warrant plans
News
22 April 2016
ADD is extending its services to cover staff fringe benefits so you can now get in touch with us for option plans and warrant plans. If you offer a bonus you could obtain a higher net amount for the recipient at a lower cost for you ……
If you offer a bonus to your employees, an option plan or warrant plan could be advantageous to you. Both options are more attractive in fiscal terms for your employees and cost you less given their status as investment products.
With an option plan your employees pay 27 to 43% tax on benefits in kind compared with 50% in the case of a bonus payment in cash. Nor do you pay any employer's contributions. There is, however, one condition: options have to be kept for one year (at least). In other words, the 'bonus' is provided with a lag of one year. The money is placed in a defence fund, hence the equity risk is limited.
If you opt for a warrant plan, the warrants can already be sold after three days. You pay the usual taxes and you save on the social security contributions.
Let us take a numerical example to offer a more concrete explanation. Suppose you pay a bonus equal to €1,000:
- when the bonus is paid that costs you €1,300, while your employees receive €450, or even less, in their accounts;
- with an option plan, no social security contribution is required. The bonus costs you €1,000, while your employees receive €600 (one year later and subject to neutral stock market movements).
- If you opt for a warrant plan, the cost for you is also €1,000, while €550 is paid into the accounts of your employees (after three days).
ADD is available to develop an option plan or warrant plan for you. These options are advantageous for both your business and your management company. You are obviously always welcome to get in touch with us for insurance solutions applicable to fringe benefits: group insurance, individual pension commitments, additional guarantees (guaranteed income and death insurance) and group hospitalisation insurance.