In the labor environment, some companies are interested in providing extra benefits to their workers, and one of those benefits is to offer a savings fund. However, in practice, some employers can be confused when offering a savings fund and make the mistake of offering a savings bank, since each one has unique characteristics and benefits. Let us look at the differences between the two:
The Savings Bank ,is an extra-legal benefit that is defined as a fund composed of voluntary contributions made by workers, from whom a portion of their salary is periodically deducted, whose main objective is the accumulation of resources to facilitate loans to workers on preferential terms and with accessible interest rates, lower than those of the market, while generating returns that are distributed along with the amount saved by the worker.
Because workers can decide the amount of withholdings from their wages, it is possible to tailor their contributions according to their individual financial needs and goals. It is important to note that the funds deposited in the Savings Fund come exclusively from workers’ contributions.
The Savings Fund is also an extra-legal benefit that is defined as a set of financial contributions made by both the company and the workers. The company undertakes to make regular contributions, agreed on a weekly, fortnightly, or monthly basis, while the workers agree to discounts from their salaries in amounts agreed between the two parties. Contribution modalities may vary, either as a percentage of wages or fixed amounts in pesos. The company’s contribution may match or differ from that of the workers. This dynamic multiplies the employee’s savings over time, strengthening his or her financial position.
Likewise, as it is an extra-legal benefit, it is common for employers to try to obtain some benefit such as tax deduction, however, according to the Income Tax Law, there is a ceiling for both the withholding and the deduction of this concept, which in both cases is limited to the contribution not exceeding 13% of the worker’s salary.
On the other hand, and with regard to the administration of the resources, these can be carried out in the following ways:
- Administration by the workers: In this modality, a commission formed by the employees themselves is in charge of administering the fund or savings bank, determining the criteria for its management.
- Joint company-worker administration: The company assumes responsibility for making the corresponding discounts, granting loans, and making the respective collections, in collaboration with a mixed commission made up of representatives of the company and the workers.
- External administration: These funds can be deposited in a financial institution external to employees and workers, which can generate greater certainty in the management of the funds and can even generate some type of return or interest, which is the most common.
It is important to mention that although these are voluntary contributions, there is a limit to the discounts, as they are subject to certain legal limits, which vary according to the worker’s salary, which are as follows:
– For minimum wage workers, discounts for the promotion of savings are prohibited.
– For workers with a salary higher than the minimum wage, the maximum limit for salary deductions is 30% of the excess of the minimum wage over the difference between the income received and the general minimum wage in force.
In addition, as these are voluntary benefits, it is recommended to document the voluntary nature of the worker’s acceptance of these discounts in order to guarantee their legality with the following:
1. Voluntary Consent: It is essential that the worker freely and voluntarily gives his or her consent to participate in the savings fund or savings fund.
2. Formal Documentation: There must be documentation to support this consent, such as a clause in the employment contract or an acceptance form signed by the worker.
3. Transparent Information: The company should provide clear and transparent information about the conditions and benefits of the benefit, ensuring that the worker fully understands the terms.
In summary, by granting benefits such as the savings fund, companies assume specific obligations; therefore, it is crucial to document the worker’s voluntariness in accepting these discounts and to ensure the proper safekeeping of the funds to guarantee their correct administration and compliance.
It is essential to understand the differences between the Savings Fund and the Savings Bank, since while the former involves contributions from both the company and the workers, the latter is made up exclusively of contributions from the latter. Both instruments are intended to provide employees with access to loans on favorable terms, but their structure and administration may vary. At Vega, Guerrero & Asociados, we are here to provide you with more information, legal advice, and support in labor and tax matters.
