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Bonus Pension Plan – a smarter way to invest in the future of your team

Discover a smarter way to invest in the future of your team through a Bonus Pension Plan – a smarter way to invest in the future of your team through a Bonus Pension Plan.

19/02/2026 · 3 minute read

Bonus Pension Plan – discover the advantages

Did you know that nearly 1 in 4 employees received a bonus in 2024? In today’s tight labour market, it is more important than ever to reward top talent and strengthen their engagement. Paying a bonus in cash may seem like the easiest way, but there is a smarter way to invest in the future of your team – a Bonus Pension Plan! Paying a bonus in cash is the simplest way to reward your employees, but unfortunately, it is not the most advantageous solution for either you as an employer or your employees. As an employer, you pay an additional 25% social security contributions on top of the gross bonus amount, which significantly increases the total cost for your company. For the employee, social security contributions (13.07%) and personal income tax (up to 54%) are deducted. This considerably reduces the net value of the awarded bonus. For example, if you grant a bonus of €10,000, it actually costs your company €12,500, while the employee ultimately takes home approximately €4,000 net.

If you choose to reward your employees through a Bonus Pension Plan, a double opportunity for optimisation opens up: lower costs for your company and a more favourable tax treatment for your employee. With a Bonus Pension Plan, your company pays only 8.86% social security contributions and 4.4% premium tax, which reduces the total cost to approximately €11,326 — a saving of nearly 10%.

From the deposited amount of €10,000, the insurer deducts management fees (between 2.5% and 3.5%). The remaining premium is invested until your employee’s retirement and will only be taxed upon payout at the favourable rate of 15.55%. Comparing the two scenarios — cash payment versus Bonus Pension Plan — using the same assumptions about returns and investment period, we see that the net final amount for your employee through the bonus plan more than doubles.

You can increase this benefit even further by passing on the savings your company achieves through the Bonus Pension Plan to your employees. In this case, your employee receives not 106%, but even 123% more net value compared to a cash bonus with the same gross employer cost. Just like with a group insurance plan, the funds in a bonus pension plan are technically locked until retirement age. However, if you have employees who have planned real estate investments, they can immediately take an advance of up to 75% of the accumulated reserves. If you have any questions about optimising your bonus plans or would like to discuss how to make the best use of them, please feel free to contact us. We are always ready to schedule an appointment and explore the best solutions for your situation together.

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