What You Need to Know
Your end-of-year premium choices through Payflip can have a small impact on your future pension. Let's break down exactly what this means for you!
🔍 How Does It Work?
Your pension is calculated based on your annual salary.
There's a yearly pension ceiling of €80,485.32 (amount for 2024).
If your yearly salary is above this ceiling, choices in your flex plan won't affect your pension.
If your yearly salary is below this ceiling, choices in your flex plan will affect your pension.
📊 The Impact in Numbers
Let's look at a practical example. Let's say you've chosen the reimbursement of pension savings in Payflip.
If you use €1,020 gross (1110,37 employer cost) in Payflip, the impact on your pension will be as follows:
Family situation | Yearly impact | Monthly impact |
Single person | €14.80 | €1.11 |
Family (married or legally cohabiting) | €18.51 | €1.54 |
🌟 Long-Term Perspective (20-Year Example)
Let's say you're using Payflip for the next 20 years to reimburse your pension savings.
Family situation | Yearly impact | 20 years impact |
Single person | €14.80 | €296.10 |
Family (married or legally cohabiting) | €18.51 | €370.12 |
This means in 20 years of reimbursing the pension savings through Payflip, you will have €296.10 or €370,12 pension savings less.
💰However: If you reimburse the pension savings for the next 20 years, you will get a total netto advantage of around €2062. What an advantage!
💡 Real-Life Example 2 years of using Payfip
Let's say you want to take full advantage of your budget and you are using €2500 in the first year and €2460 in the second year of using Payflip.
You will be able to make the following choices:
Pension savings reimbursement - 2x €1020.
Smartphone - €1000
Smartwatch - €250
Bike lease - €3000
Extra vacation days - 2 extra days
The total pension impact over these 2 years will be the following:
Single person: €66.15 bruto
Family: €82.68 bruto
For trading in the above amount of pension savings you will receive a smartphone of 1000 euro, a smartwatch of 250 euro, a bike of 3000 euro, 2 extra holidays and you will receive 948,6 netto payout of reimbursement of pension savings.
⚖️ Important Considerations
There will not be an impact if your salary is above the ceiling of €80,485.32 (amount for 2024).
The impact on your pension is relatively small compared to the immediate benefits.
You're often getting much more value through tax advantages/
The choice remains personal and depends on your current needs versus future planning.
🤔 Making Your Decision
Consider that while there is a small pension impact, the immediate tax benefits and purchasing power through Payflip often outweigh the long-term pension effect. For example, choosing pension savings reimbursement alone can give you a net advantage of at least €103.10 annually!
Need more help deciding? Our customer success team is here to help you make the best choice for your situation! 💪