Flexi Benefit Plan

Flexi Benefit Plan (FBP) - Contents

• 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

Introduce employee friendly and Tax efficient

compensation structure

Enable employees to select and manage FIS approached

their own compensation
Deloitte who are
our Tax Advisors to
study our current
Introduce Flexible Benefits Plan with Comp Structure
multiple tax savings options and advise changes
based on Tax laws.

Introduction of on-line reimbursement module

to administer the scheme

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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

• Administration of FBP including reimbursements is being outsourced to Hewitt

• Employee can view their own compensation details in HR Workways i.e. “Hewitt site” and make appropriate
selection of FBP components in the FBP window.
• Selection window will be opened twice a year from 3rd to 15th of May & October.
• For new joinee/promotion/Co. Car Scheme cases window will be opened in the next salary processing month from
3rd to 12th.
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Total Remuneration Structure - Current Vs New

Flexi Basket to be introduced in the comp structure as illustrated below

Current TR break Up New TR breakup with Flexi benefits

A. Fixed Pay A. Fixed Pay

(Basic + HRA + Conveyance + Management (Basic + HRA)
Allowance +LTA)

Flexi Basket *– Options to be selected by employee

(Options follow in next slide)

B. Benefits B. Benefits
(PF + Gratuity + GPA + GHMI) (PF + Gratuity + GPA + GHMI)

C. Performance Pay C. Performance Pay

* 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

Note:- Reimbursements are subject to submission of bills

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Employee can choose any one

Illustration : Allocation of FBP
Assumptions - Band : SP2 TR : 1,400,000

Compensation Mix (excluding variable) Amount

Fixed - (Basic+HRA) pa. 572,727
FBP - (Components given below) 625,730
Variable 127,273
Benefits - (GHMI + GPA+ PF+Gratuity) 74,270
Total Remuneration 1,400,000

Flexi Components Selected (Annual) Max. Entitlement

Child Education 2,400 2,400
Hostel Allowance 0 7,200
Medical Reimbursement 15,000 15,000
Food Coupons 13,200 13,200 •Allocated to flexi components
LTA 42,000 120,000 INR 428,600.
Conveyance Allowance 0 19200
•Balance amount not allocated
Self-Owned car - Fuel/Maintenance 0 28,800 of INR 197,130 has been
added to management
Self-Owned car - Driver 0 10,800 allowance.
Company Car - EMI 180,000
Company Car -
80,000 80,000
Fuel/Maintenance/Insurance
Company Car - Driver’s Salary 96,000 120,000
Mgmt . All. (taxable) – Balancing amount 187,530
Total FBP Amount 625,730
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Illustration 2 :Tax savings Opted for Co Car Scheme with Driver
Assumptions : Band - SP2 Total FBP – 625,730

CURRENT STRUCTURE NEW STRUCTURE WITH FBP

Max.
Expns FBP Expns
Components Current Exemption Exemption Entitlemen
incurred Selected incurred
t
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 (Not applicable for IM Employees) NA 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 0 0 0 19,200
Self-Owned car - Fuel/Maintenance NA 0 0 0 0 0 28,800
Self-Owned car - Driver NA 0 0 0 0 0 10,800
Company Car - EMI 180,000 180,000 180,000 180,000 180,000 180,000
Company Car - Fuel/Maint./Insurance 80,000 80,000 80,000 80,000 80,000 80,000 80,000
Company Car - Driver’s Salary NA 96,000 0 96,000 96,000 96,000 120,000
Mgmt . All.– Balancing amount 316,530 0 197,130 0
Total Amount 625,730 423,000 290,000 625,730 436,200 428,600
Perquisite value on Co. Car to be taxed 21600 32400
Non-taxable income on FBP 268400 396200
Tax Exemption @ 30.9% 82936 122426
Tax Savings 39490

• LTA assumed : Airfare Rs 3500 x 2 way x 6 members

• Extension of Driver’s salary reimbursement under Car Scheme to SP2
Band will increase tax savings by Rs. 26,327 8
• If Driver is not opted for - the savings on other FBP accounts is Rs. 13,163
Illustration 2 :Tax savings Opted for Self Owned Car
Assumptions : Band - SP2 Total FBP – 625,730

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

• LTA assumed : Airfare Rs 3500 x 2 way x 6 members

• Extension of Driver’s salary reimbursement under Car Scheme to SP2
Band (if fully availed) will increase tax savings by Rs. 3,428
• If Driver is not opted for - the savings on other FBP accounts is Rs. 16, 781 9
 Key Details of Flexi Components

Read FBP Policy for detailed conditions/clauses

relevant to selection and reimbursements

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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

• To meet the cost of regular medical expenses

• Entitlement : Rs 15,000/- per annum
• Tax exemption : Reimbursement exempted upto Rs. 15,000.
• Applicability : P1 and above ( AS : SE & above, BPO : TL & above, Support : AM & above)
Medical • If opted for, the exemption requires employee to submit bills to the employer for reimbursement.
expenses • The benefit can be claimed in addition to GHMI OPD benefits for expenses which are not claimed or
claimable under GHMI (e.g. OTC medicines, claims rejected by OPD GHMI)
• Excludes expenses which cannot be categorised as ‘domiciliary medical treatment’ such as baby food,
cosmetics, personal health products.
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FBP Components – LTA

• To meet the cost of leave travel expenses on fares

• Entitlement : Rs 120,000 per annum
• Tax exemption : Can be claimed for 2 domestic
journeys in a block of 4 years for self, spouse, 2
children and dependant parents . Current block
2014-2017
• Applicability : P1 and above ( AP : SE & above, BPO
LTA : TL & above, Support : AM & above)
• If opted for, the exemption requires employee to
submit travel proofs to the employer for
reimbursement
• Carry forward balance is applicable.

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FBP Components – Conveyance / Self Owned car / Company Car

• To meet the cost of commuting between residence and place of work

• Entitlement : Rs 1600 per month
• Tax exemption : Rs 1600 per month
• Applicability : P1 and above ( AP : SE & above, BPO : TL & above, Support : AM & above)
Conveyance • If opted for, allowance will be paid monthly through payroll. Supporting voucher not required.
Allowance • When employee switches to Self Owned car or Company Car, allowance will be Nil from that month.

• If own car is used, employee may claim Fuel, Maintenance, Driver expenses incurred for official purpose
• Entitlement :

Car Engine capacity Fuel / Maintenance Driver's Wages

Engine cc upto 1.6L 1800 p.m. / 21600 p.a. 900 p.m. / 10800 p.a.
Engine cc > 1.6L 2400 p.m. / 28800 p.a. 900 p.m. / 10800 p.a.
Self Owned car
• Tax exemption : Reimbursed amount upto the limits appearing in entitlement.
• Applicability : SP1 and above
• If opted for, the exemption requires employee to submit bills/driver’s receipt for reimbursement
• Employee to declare cubic capacity of car engine in the claim.
• Employee to provide copy of RC book to provide proof of ownership/engine capacity
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Company
CompanyCar Scheme – New Features

• 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)

• Purchase of pre-owned used car

• Employee can purchase a used car from a third party
• Used car shall not be more than 4 years old and should not be owned by the employee
• Value of car and loan amount will be determined by banker on case to case basis
• Financing tenure will be for 2yrs i.e. EMI will be for 2yrs
• Costs of transfer of Registration , agents hired etc will be borne by the employee
• Maximum car cost entitlement is as per new car under Company Car Scheme
• Entitlement for Fuel ,Maintenance and Driver salary is as per new car under Scheme.

• For scheme details refer to Company Car Scheme document.

• For reimbursement clauses/details refer to FBP policy.

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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.

Perquisite Value - Car Engine capacity Running /Maintenance Driver

FY 2016-2017 for Engine cc upto 1.6L 1800 p.m. 900 p.m.
use of Company Car :
Engine cc > 1.6L 2400 p.m. 900 p.m.

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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

• Taxability : Taxed on Perquisite Value as per Income Tax laws

• Applicability : SP1 and above (employees not entitled to company transport)
• If opted for, the exemption requires employee to submit bills/driver’s receipt for
reimbursement

Refer to following documents for details :

• For scheme details refer to Company Car Scheme document.
• For reimbursement clauses/details refer to FBP policy
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Timelines – FBP Selection by employees

Activity Timelines Remarks

Selection of 3rd May (Evening) to 18th Selections once made will be

components/allocation at the May editable only when the window
launch of the Plan opens next in October

Re-Selection of 3rd Oct (Evening) to 15th Reallocation of the balance

components/Re-allocation Oct unutilized amount can be done
in October

Selection of components 3rd to 12th every month of www.hrworkwaysindia.com

/allocation – New Joinee / the next payroll cycle **
Promotion / Increment /
Relocation /Co.Car Scheme
cases

** 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

Activity Timelines Location Responsibility

Online submission of claim forms Full Month www.hrworkwaysindia. Employee
com
Submission of physical voucher & bills Full Month Location FBP drop box Employee

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

Employee will rcv. a auto

mail from Hewitt
www.hrworkwaysindia.com
confirming submission of Rejection
reimbursement claim Employee will rcv a due to
Employee needs to
auto mail from inadequate
check the reason of
A Rejected Excelity if any claim
rejection online. supporting
p gets rejected. docs.
p Y
d e
s
Print the online
Claims will be paid
Claims will be paid reimbursement history,
through NEXT monthly 20
through monthly salary attach the supporting
salary
document & drop it
Query Resolution

• Query related selection/allocation and reimbursement process over the

portal.
• Employee can raise their ticket on '[email protected]' (query resolution
time is 72 hrs)

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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.

If any information /reimbursement claims submitted by an employee are 22

found to be false, strict disciplinary action would be initiated by the Company
Claim Reimbursement - Do’s & Don’ts

• 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

• Employee should complete selection procedure within 4-5 days of window

access to avoid any last day hassle like server slow down situation.

• 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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