Flexi Benefits Plan April 2016
Flexi Benefits Plan April 2016
• Objective
• The Plan
• Current vs New Compensation Structure
• FBP Components and limits - Summary
• FBP Allocation – Illustration 1
• Tax Savings on FBP Allocation : Current vs New - Illustration 2.
• Tax Savings on FBP Allocation : Current vs New - Illustration 3.
• Details of FBP Components
• Key Timelines
• Administration Process
• Query Resolution
• Reimbursements - Some Key Points to Note
• Claim Reimbursement - Do’s & Don’ts
• Some Basic Guidelines
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Objective
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Flexible Benefit Plan (FBP)
• Covers employees in Band P1 and above with some variations
• FBP (Flexi) component is being introduced in the employee salary structure.
• Total Remuneration (TR) is being divided into Fixed , FBP, Benefits and Variable Pay Components (currently
it is Fixed, Benefits and Variable).
• A number of tax saving options is being provided under FBP for selection by employees.
• Total allocation under FBP will be allowed up to the FBP amount appearing in the salary structure.
• Each option has a specified max. entitlement . Allocation has to be within the ceiling .
• Balance amount, if any, after selection and allocation will be added to Management Allowance and paid
monthly as a taxable component.
• Reimbursement will be as per the accrued balance at the time of claim.
• FBP components unutilized (except LTA) will be paid with March salary and is fully taxable. March claim
should be incurred and claimed by 10th of March to enable closure and balance payout.
• Amount allocated to LTA component can be carried forward to next year or paid out in March
B. Benefits B. Benefits
(PF + Gratuity + GPA + GHMI) (PF + Gratuity + GPA + GHMI)
* Note:- Conveyance , Management allowance and LTA will be moved to Flexi basket in the new structure.
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Flexi Basket Options
• Option to select flexi components up to the total FBP amount reflected in the comp structure.
• Amount allocated to each option must be within the entitlement specified below .
• Balance amount after selection, if any, will be added to the management allowance and paid monthly
• Amongst Conveyance/Self Owned car/Co.Car Scheme only one can be selected at a time.
FBP Component Max Entitlement (INR) Eligibility Mode of payment
Child Education Allowance 100 p.m. per child upto 2 children P.1 & above Pay Monthly through salary
Hostel Allowance 300 p.m. per child upto 2 children P.1 & above Pay Monthly through salary
Medical Reimbursement 15,000 p.a. P.1 & above Reimbursement
Food Coupons (Not Applicable AS - SP2 & above BPO/Support
13,200 pa - P3 & above Food Coupons to be provided
for IM Employees)
LTA 120,000 p.a P.1 & above Reimbursement
Conveyance Allowance 1600 p.m. P.1 & above Pay Monthly through salary
Self Owned Car - 1800p.m. (engine cc upto 1.6L)
SP1 & above Reimbursement
Fuel/Maintenance 2400 p.m. (engine cc >1.6L)
Self Owned Car - Driver 900 p.m. SP1 & above Reimbursement
Co. Car Scheme - Car EMI Per Company Car Scheme Policy SP1 & above direct deduction by company
Co. Car Scheme -
Per Company Car Scheme Policy SP1 & above Reimbursement
Fuel/Maintenance/Insurance
Co. Car Scheme - Driver 120,000 p.a SP1 & above Reimbursement
Expns Expns
Components Current Exemption FBP Selected Exemption Max. Entitlement
incurred incurred
Child Education NA 10,000 0 2,400 10,000 2,400 2,400
Hostel Allowance NA 0 0 0 0 0 7,200
Medical Reimbursement NA 15,000 0 15,000 15,000 15,000 15,000
Food Coupons NA 0 0 13,200 13,200 13,200 13,200
LTA 30,000 42,000 30,000 42,000 42,000 42,000 120,000
Conveyance Allowance 19,200 19,200 0 0 19,200
Self-Owned car - Fuel/Maintenance NA 70,000 0 21,600 70,000 21,600 28,800
Self-Owned car - Driver NA 96,000 0 10,800 96,000 10,800 10,800
Company Car - EMI 0 0 0 0
Company Car - Fuel/Maint./Insurance 0 0 0 0 80,000
Company Car - Driver’s Salary NA 0 0 0 120,000
Mgmt . All.– Balancing amount 756,530 0 520,730 0
Total Amount 625,730 233,000 39,600 625,730 246,200 105,000
Non-taxable income on FBP 39600 105000
Tax Exemption @ 30.9% 12236 32445
Tax Savings 20209
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FBP Components – Child Education / Hostel / Medical
• To meet the cost of education incurred for children in school (upto Class XII)
• Entitlement : Rs 100 per month per child upto 2 children
• Tax exemption : Rs 100 p.m. per child upto 2 children
Child
• Applicability : P1 and above ( AS : SE & above, BPO : TL & above, Support : AM & above)
education
• If opted for, Allowance will be paid monthly through payroll
Allowance
• Supporting voucher not required
• To meet the cost of hostel facility incurred for children in school (upto class XII)
• Entitlement : Rs 300 per month per child upto 2 children
• Tax exemption : Rs 300 p.m. per child upto 2 children
Hostel • Applicability : P1 and above ( AS : SE & above, BPO : TL & above, Support : AM & above)
Allowance • If opted for, Allowance will be paid monthly through payroll
• Supporting voucher not required
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FBP Components – Conveyance / Self Owned car / Company Car
• If own car is used, employee may claim Fuel, Maintenance, Driver expenses incurred for official purpose
• Entitlement :
• Driver’s Salary
• Driver Salary re-imbursement to be given to SP1 & above upto Rs. 120,000 per annum
(Currently Driver’s Salary is reimbursed to SL Band and above)
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FBP Components – Company Car EMI
• To provide a car to employee through Company Car Scheme. Car is owned by the
Company.
• Car Cost Entitlement :
Maximum Vehicle Cost (INR) (incl. Road
Band
Tax, Insurance etc.)
SP1/SP2 1,500,000
SP3 and
2,000,000
LP
Company Car EMI • Taxability : Taxed on Perquisite Value as per Income Tax laws
• Applicability : SP1 and above
• Employee should ensure that sufficient balance is available in Management
Allowance to accommodate EMI
• The EMI amount will be directly incorporated into the FBP window by the
Company
• The EMI amount once allotted in FBP will be frozen for the financing tenure in the
window.
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FBP Components – Company Car Fuel & Maintenance/Driver
• Employees who have availed of a car under the Company Car Scheme can take
reimbursement for Fuel, Maintenance and Driver’s wages.
• Employee has to select and allot funds to Company Car Fuel & Maintenance and
Driver Wages options under FBP
• Max Entitlement per annum :
Maximum Expenses (INR) for Fuel,
Bands
Maintenance and Insurance
SP1 89,600
Company Car – Fuel & SP2, SP3 123,200
maintenance and LP 151,200
Driver’s Wages Maximum Expenses (INR) for Driver’s
Bands
Salary
SP1 ti l l
134,400
LP
** Once the new salary is uploaded in Hrworkways through the first payroll, window will open in the
next payroll cycle to enable selection. Updation in Hewitt site takes place once payroll is processed
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Key details of Reimbursement Process
Steps:-
1. Claims updated online up to the 10th of the month will be considered for processing in the current month
2. Physical documents of claims updated online to be submitted on or before 11th in the Hewitt drop box.
3. The documents will be collected by the Hewitt representative on 11th
4. All claims have to reach Hewitt by the 15th of the month for checking and processing . Claims received up to
10th of the month will be considered for processing in the current month
5. An auto mail on reimbursements claims will be sent
a. 20th late evening – Confirmation mail to employees on reimbursement claims received before 15th
b. 25th late evening – Information to employees who have updated claims online but if the same has not
reached Hewitt
4. An auto mail will be sent on the 25th / 26th to employees if there are any rejections on the reimbursement
claim. Reasons for rejection etc., can be viewed online
5. if rejections are due to inadequate supporting, employee should print the online reimbursement history, attach
the supporting document and send it to Hewitt. If the documents are complete, processing will be done in the
next reimbursement cycle.
6. Employee can view the claim status online. (https://www.hrworkwaysindia.com)
7. Employee can view the updated amount available/reimbursed on the site by 3rd of every month.
8. A Declaration from the employee that the bills/receipts are genuine and action may be taken by Company if
found to be fake , in a prescribed format, must be attached with every physical voucher submitted
Suggestions :- It is advisable to keep a photocopy of the bills submitted.
Paste the petrol bill or any small size bills on a A4 size sheet to keep them intact.
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FBP Reimbursement Process - Snapshot
Collection of the claim vouchers from On 11th of every month Location FBP drop box Excelity Representative
location drop boxes
All the bills without copy will be On 11th of every month Excelity Representative
returned to HR SPOC
Communication to the employee HR SPOC
about the bills without the voucher
Auto mailer to employee confirming By 20th of every month Excelity
the receipt of the claim documents
Auto mailer to employee about the By 25th/26th of every Excelity
rejection of the claim documents month
Payout through current month salary Physical claims collected FIS
for all approved claims by 11th will get paid
along with current
month salary.
Claim submission in Hrworkways - flowchart
Submit reimbursement
claim online & take a Auto mailer will be sent by Hewitt
print of voucher and sign
• Employee submits claim - An auto mailer will be sent to employee about
the confirmation of the submission of online
Attach bills &
Declaration to the • 20th late evening – Confirmation mail to employees on reimbursement
printed online claim claims received dropped before 11th
vouchers & tally for
correctness • 25th late evening – Information to employees who have updated claims
online but if the same has not reached Hewitt
•An auto mailer will be sent on the 25th / 26th to employees if there are any
Drop in the location FBP rejections on the reimbursement claim. Reasons for rejection etc., can be
drop box viewed online
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Reimbursements - Some Key Points to Note
• Please ensure that you read the relevant policies : FBP Policy, Company car Scheme
• Ensure claims are in line with the FBP policy guidelines/conditions/clauses
• Details of items which are not claimable ,appearing in the bill should not be claimed or
updated in the claim form.
• Education Allowance and Hostel allowance for each child can be claimed by one parent, not
by both parents
• Keep child education/hostel expenses supporting documents in case these are required to be
submitted
• Declaration form in the prescribed format must be attached, duly signed.
• Ensure that all the bills appearing in the online voucher are physically attached to the copy of
the same.
• Ensure Driver’s Licence copy , RC book copy, snapshot of leave approved in the system is
attached as relevant to avoid delay in processing or rejection of claims
• Incase voucher is rejected, check the reason online and resubmit the claim with the complete
and correct documentation.
• Payment of the resubmitted claims will happen in the next payroll cycle
• Ensure that online submission of the claim happens by 10th of every month to be processed
in current month’s pay cycle.
• Ensure that the claims are deposited by 10th in the FBP drop box so that it gets processed
with the current months payroll cycle.
• Do’s
Ensure that a print of the online voucher is taken as the online voucher# is main reference point.
Ensure the voucher is duly signed by the employee
Ensure details of bills appearing in the online voucher are physically attached to the copy of the
same.
Ensure that the declaration is duly signed and attached with every voucher.(Format will be
uploaded on the HRSD)
Keep a photocopy of the bills.
Employee should put the claims in an envelop and drop it in the drop box.
Ensure that E-number is written at the back of all the bills.
Ensure that a snapshot of leave approved in the system is attached to the voucher for claiming
LTA as non taxable.
Ensure that the photocopy of RC is attached with the voucher while reimbursing fuel &
maintenance expenses under Self Owned car
Copy of the driver license needs to be attached with the voucher while claiming driver salary.
• Don’ts
Details of items which are not claimable ,appearing in the bill should not be claimed or updated in
the claim form.
Photocopy of bills should not be attached to the voucher
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Some Basic Guidelines
• Use the FBP Planner & Tax Calculator to simulate options and decide well in
advance so that actual entry in the FBP window does not take much time
• If you are planning to buy a car in the middle of the financial year you are advised
to keep enough balance in the management allowance to accommodate the car
EMI.
• Select LTA if there is still scope of exemption in the year i.e. you have not already
claimed 2 LTAs in the current block of 4 years.
• Employees are advised at the time of allocation to leave some balance in the
management allowance to accommodate the GHMI premium requirement at the
time of renewal of the policy.
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THANK YOU
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