Incentive programs

A carefully designed and effectively implemented incentive program can be beneficial both for the participants and the employer. This is because theidea of incentive schemes is  to combine the participants’ achievements with the company’s growth. Greater involvement in the development of the company and, consequently, the achievements of eligible persons and their additional rewardsare reflected in an increase in the employer’s financial performance. Incentive programs are effective HR management tool to retain key employees or managers and attract new talent.  But they also have tax implications which need to be taken into account.

Therefore, employers are very often faced with the challenge of designing an incentive program in such a way that it is attractive to the participants, while at the same time being sensible from the tax and social security contributions perspective for both the employer and the beneficiaries.

The Personal Tax and Employer Advisory team at MDDP has extensive experience in this area and specialises, among other things, in verifying the terms and conditions of all types of incentive programs and assessing their tax and social security implications.