If the cafeteria plan is to be budget-neutral, it is important that the benefits in the plan are financed with a budget. After all, an employee must be able to hand in or create a budget before a benefit can be chosen. The first challenge for an employer is to identify available budgets. In this fourth article on the principles of a cafeteria plan, we will first summarize a few principles. Then we will zoom in on the most popular budgets. For each budget, we list the advantages and disadvantages and consider a few points of interest.

General principles

For many employers, identifying available budgets is the biggest challenge. After all, there are many legal and (para)fiscal obstacles. The biggest stumbling block is the so-called 'hierarchy of legal norms'. In short, this means that you must always look at the level at which the budget is regulated to know whether the budget can be used in the cafeteria plan. After all, in labour law, there is a hierarchy between different legal sources. This means that nothing can be stipulated in a lower source that conflicts with a stipulation of a higher source. If, for example, the specific budget has been laid down at sector level in a generally binding collective labour agreement, you cannot simply deviate from it at company level or in an individual employment contract. As an employer, you must also take into account some (para)fiscal principles and there are quite a few crucial points to consider, such as the timing of the choice, but we will go into that in more detail in another article.

In general, there are three possibilities. Firstly, as an employee, you can hand in a budget. This means that you hand in an existing budget, to which you would in principle be entitled, in order to exchange it for another benefit. Secondly, you can also create a budget. In that case, you usually also need to hand in something, such as holidays or a car, and you convert this into a budget. A third possibility is that, as an employer, you add a specific budget to the cafeteria plan, without the employee having to surrender anything. For example, an employer could add a budget for mobility to the cafeteria plan so that the employee can then spend it on alternative mobility.

Cash or credit?

In some cafeteria plans, budgets are converted into credits or points. The usefulness of this is rather limited and we only see disadvantages in practice. The biggest disadvantage is the complexity that a credit system creates for the employee. The employee will always recalculate the credits in cash, which makes it more difficult to simulate. The authorities also apply the same rules regardless of whether cash budgets are used or an alternative. Moreover, it is not advisable to put all budgets in the same pot. It is very important for certain budgets that you can trace which benefit your budget was linked to.

Overview of budgets

Listing all possible budgets is an impossible task. We will therefore limit ourselves to a few popular budget possibilities and general principles. We recommend always having a thorough legal and (para)fiscal analysis carried out to determine whether it is possible to include a particular budget in the cafeteria plan or flexible mobility plan.

End-of-year bonus

In practice, the end-of-year bonus is always the most popular budget to include in a cafeteria plan. Unfortunately, the end-of-year bonus can only be used flexibly in certain sectors. This requires that the end-of-year bonus is either not regulated at sector level (a typical example is the 14th month, or an end-of-year bonus paid to executives, while this is not provided for in the applicable collective bargaining agreement) or that it is determined at sector level that the end-of-year bonus can be exchanged for an equivalent benefit or used flexibly in another way.

The main advantage of an end-of-year bonus is its limited administrative impact. The end-of-year bonus is paid only once during the calendar year, which reduces the impact on payroll and administrative processes. In addition, the end-of-year bonus is recurrent, so that this budget can easily be used for long-term benefits.

A disadvantage of the end-of-year bonus is that in some cases, the budget is not sufficient to finance a certain benefit. This is especially the case for the company car.

Gross salary

Gross salary is also a very popular budget. Gross salary can almost always be used as a budget in a cafeteria plan, if certain conditions are met, such as the minimum scales determined at sector level and the 20% limit. This limit is a condition in the legislation, according to which the value of the alternative benefits cannot be more than 20% of the basic salary.

The main advantage of the gross salary is its wide application combined with a high budget. For workers, it is in most cases the only possibility to create a budget. However, there are many points of attention. Obviously, we need to account for the high administrative impact, especially for payroll, as well as the numerous unforeseen circumstances that can have an impact on this budget, such as temporary unemployment. Try to map out the points of attention during implementation.

Extra-legal holidays

Some employees have too few days off, while others have too many. This can lead to a lot of frustration among employees. Certain extra-legal holidays, i.e., days granted at company or individual level, can be surrendered and converted into a budget under certain conditions. The most important point here is that if these days are used for a long-term benefit, the employee should in principle hand them in every year.


Without knowing it, many Belgian companies already have a limited cafeteria plan. Indeed, many employees have the option to convert (part of) the bonus into 'warrants'. It is possible to expand this option and offer the employee the choice of also spending this budget on other benefits in the cafeteria plan. Of course, the bonus can still be paid out in cash.

We recommend that the conversion of the bonus is carefully examined from a legal and (para)fiscal perspective. "Timing is everything", especially in the case of a bonus. Moreover, it is not certain that an employee will receive a bonus every year; this depends on the results. This is especially a point of attention if the bonus is exchanged for a long-term benefit, such as a company car.

Car budget

Adding a car budget to a cafeteria plan offers many advantages. Firstly, you offer the employee insight into the budget. This allows the employee to create a budget by taking a smaller car or even no car at all, or to opt for fewer options. In doing so, you ignore the complex rules of the federal mobility budget. If the employee simply pays out that budget as cash, there will of course be a hefty bill. For companies that are switching to a more cost-conscious TCO approach, it is a good idea to use a tool to allow employees to simulate for themselves which car they will choose.

Smartphone budget

In many companies, certain employees are entitled to a smartphone. This may be a standard smartphone, or it may be a so-called 'bring your own device' budget (a budget that allows the employee to buy a smartphone themselves). In both cases, the employer could opt to include this budget in a cafeteria plan. This gives employees the opportunity to choose a smartphone themselves and to upgrade if necessary. This avoids frustration among employees if the company has chosen a cheaper model or a specific brand.

Referral premium

A referral bonus is very effective in the 'war for talent'. Why not use your own employees to find talent and reward them for it? However, a cash referral premium is heavily taxed. One possibility is to include this budget in the cafeteria plan. The employee can then choose whether this is paid out in cash or converted into another benefit. Moreover, this is an opportunity to put the interesting referral bonus in the spotlight.

Other mobility budgets

Besides the car budget, there are also other budgets linked to mobility. For example, many companies have a major problem with parking. So why not value this parking and offer employees the option of exchanging the parking space under the building for a parking space a little further away? The employee could, for example, exchange it for a subscription to a station car park.

Another possibility is the fuel budget. Many employees still enjoy an unlimited fuel budget with their company car. You could allow the employees to choose to limit or surrender this budget and thus create a budget. The advantage is that, as a company, you also have more control over the (possibly rising) fuel costs. After all, fuel costs are increasingly being penalised fiscally.