Can you tell us what EmployeeLease (Lease2Motivate) is?
Kai Schwarz: "It is a program that gives employees the option to use and pay for a car in a full-service, operational lease contract that includes VAT-free fuel (if VAT is deductible in the specific country and company concerned). The huge economic benefit to the program is that employees can participate under the same terms and conditions as the employer, which gives them lower interest rates and attractive discounts."
Why is EmployeeLease such a great employee motivator for companies today?
Kai Schwarz: "The monthly lease payment and fuel costs are deducted from the employee’s gross pay. That’s a great benefit, because reducing your gross pay reduces your taxes. In other words, it is a more attractive option for employees than having a private car. If the employer can deduct VAT, the employee will have the added benefit of not paying any VAT on any of their car costs.
From the employer’s point of view, using the program will increase the total size of their fleet of company cars. That gives them more clout in negotiations for better conditions with dealerships or manufacturers and the lease company."
What type of organisations will find EmployeeLease an attractive option?
Bernd Hanisch: "The program is perfect for medium and large companies with more than 500 employees. This is because there needs to be an agreement with the employees and works council. The effort and workload involved in setting the program up make it perfect for companies of this size. In our experience, 10-15% of all the employees with a right to this benefit opt for EmployeeLease so it is less worthwhile for small companies.
Of course, for the perk to be attractive, the employees need to want to drive new cars as well!"
What is your advice for companies that want to introduce EmployeeLease?
Kai Schwarz: "It is important to ensure that all stakeholders and policy owners are involved in the decision to introduce the program. Set up an implementation team with a crystal-clear mandate, and make sure they have sufficient time to complete the process. Before you invest time and effort in the project, however, conduct a staff survey to find out how many employees are likely to be interested. It is also a good idea to ask local tax and legal experts for advice."
What makes Athlon the go-to partner for a program like this?
Bernd Hanisch: "Programs like this one, known as the ‘cafeteria model’, work by granting employees social benefits from the company’s assets: in this case, they receive a car as part of their pay package. Athlon is the pioneer of this type of program in Germany and drives innovation in this area, with almost 20 years of experience and many satisfied customers.
Our online tool, provides participants with a web-based car configurator/calculator so that management of the entire project can be digitised. In our experience, that streamlines the entire process, decreasing the workload for everyone involved.
What’s more, we have created a way for participants to compare the TCO of the monthly leasing program with the TCO of owning a private car. That way, employees can see exactly what benefit they will receive. This tool enables participants to see the net salary decrease once the lease program is in place. The benefit to the employee, compared to the cost of a private car paid for out of their net salary, is shown as a theoretical ‘salary increase’ in the form of a percentage and an amount in euros. The comparison is based on anonymised data that the employee enters into the tool him or herself. In short, the tool is secure, gives clear information and offers extra motivation by showing employees exactly what they stand to gain."
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