Granting a bonus in the form of warrants can be very advantageous, even for an SME. A warrant is a financial instrument that allows the purchase of shares, but in most cases, workers sell their warrants very quickly, often within 24 hours, thus limiting the stock market risk to just one day. This allows them to quickly access money without having to manage long-term stocks.
For the employer, warrants offer tax benefits: they are exempt from employer social security contributions and are 100% deductible. For employees, they are exempt from ONSS contributions but are subject to tax. This allows the employee to receive approximately 13.07% more net income compared to a traditional bonus. After deducting administrative costs, the worker earns an average of 28% more than with a traditional bonus. For example, if a traditional bonus of €1,000 net is granted, a bonus in the form of warrants will yield €1,280 net for a similar cost to the employer.
However, for such a system to be truly profitable, a minimum overall budget of €25,000 per year for all employees must be planned. Below this threshold, administrative costs are likely to cancel out the financial advantage. It is also important not to exceed 20% of the employee’s total salary in warrants-based bonuses.
The implementation of this system can be simple once the process is streamlined. It is often recommended to consult an expert at the beginning to ensure good communication with employees and to properly structure the system. Companies can manage this through a social secretariat or a bank, and it is possible not to offer the same amount to all employees since warrants are not a collective benefit.
Our mission in the field of corporate taxation is to help you manage a reasonable tax burden that aligns with your income and the opportunities provided by tax legislation.
