Flex Allowance

What is a Flex Allowance?

Often referred to as a Flex Pot, Flex Allowance or just Allowance, it is a monetary value employers pay towards a selection of benefits that the user chooses.

Represented on the software to the users a simple monetary value, where they can see their current spend and remaining values as they're adding and removing benefits from their basket. This enables employees to model their package and make the most of it.

What happens to the underspend?

This is matter of preference for the employer. Some employers will pay the employee the remainder of their flex allowance directly into their gross salary, whilst most commonly the employer will say "Use it or lose it" employees do not get paid any unspent flex allowance. 

The "Use it or Lose it" approach will almost always see far greater takeup of benefits, as most often if presented with the option to take the cash most employees will do so. 

What happens to overspend?

Employers will usually take the overspend from their employee's salary; depending on the benefits and employer's stance, sometimes via gross pay and sometimes via net pay. (Note: You at Work ltd are not qualified tax advisors so we suggest you seek guidance on this from your tax advisors.)

Which benefits can use a flex allowance?

A flex allowance can be used on any benefit in reality, but complications set in when the benefit is usually offered as a salary sacrifice benefit.

Examples of typical Flex Allowance Benefits:

• Travel Insurance
• Dental Insurance
• Dining Cards
• Health Cash Plans
• Voluntary Private Medical Schemes

On our software, the allowance is only usable within a benefit window. You set up your benefits window, and all benefits within that window are applicable for the Flex Allowance. Removing a benefit from the window is the only way to prevent a certain benefit from counting towards the Flex Allowance (Note, you are able to make your benefit "always available" and still allow employees to choose it without it counting towards the allowance)

How do I set the Flex Allowance per person?

This is the easy bit! Either set it person by person or  bulk update all user's values simultaneously.

You can set a different value for each person or give all users the same.