Tax-free benefits in kind – a win-win for everyone
Since 2022, the tax-free benefit limit has increased from €44 to €50 per month per employee. Sounds good at first, but what does that even mean? We are not tax consultants, but we still want to show you what non-cash benefits are all about, how you can use them sensibly and why you benefit from them:
First things first: pecuniary advantage
Let's start with the little bees and tax flowers: the monetary advantage. Companies and employers in general can offer their employees special (non-cash) benefits in addition to their salary . This can be, for example, the use of a company car, subsidies for health care or free meals. The amount that applies is always the amount that the employee would have to invest in a benefit in kind in the event of self-payment. The non-cash benefit is almost always taxable , as according to Section 8 of the Income Tax Act it is always regarded as income and thus as income subject to tax and social security contributions.
Special cases: Bonus miles, staff discounts, company cars
The pecuniary advantage always has a so-called allowance , the amount of which depends on the respective contribution in kind. If employees travel a lot on business, they can use the bonus miles they have collected up to a tax-free limit of €1,080 per year. However, the company can insist on using the bonus miles purely for business purposes.
There is also a €1080 allowance for discounts for employees. If this is exceeded, the pecuniary benefit is subject to tax: Even one cent above the benefit in kind is subject to flat-rate taxation, i.e. taxation according to the average tax rate.
When calculating the monetary benefit of company cars , there is the option of using the logbook or the one percent rule. With this regulation, the employee pays monthly tax on 1% of the gross domestic list price for private car use. In addition, he/she has to pay tax on a monthly basis at 0.03% of the gross domestic list price per kilometer traveled between home and work.
However, there are also tax-free benefits in kind . These do not have to be taxed .
What are tax-free benefits in kind? With these benefits in kind, neither the employer nor the recipient have to pay taxes. The prerequisite is that these benefits do not offer any operational benefits and are spent in addition to wages . They are not paid out in cash, but in the form of goods - i.e. goods, reimbursement of costs and accommodation. Remaining amounts may not be paid out. and the tax-free benefits must not exceed a certain monthly exemption limit. This was raised from €44 to €50 in 2022 – yeah! For event-related donations such as birthdays or Christmas, the tax-free amount is even €60. Thank you very much for the flowers.
The form in which the tax-free benefit in kind occurs is determined beforehand and must be recorded in a comprehensible manner. Every company is even obliged to check the whole thing.
Examples of tax-free benefits in kind
Subsidies that can be added to the salary without taxes include:
- Fuel vouchers
- Vouchers for goods exchange (only valid in certain shops)
- Meal subsidies, eg in the form of meal coupons
- reimbursement of travel expenses
- Corporate events
- Health-promoting measures such as memberships in the fitness studio or massages (up to 500 euros per year tax and social security-free)
- Childcare or corresponding cost allowances for it (up to 600 €)
What benefit does this give me?
Tax-free grants are a win-win situation for employers and employees. Both sides benefit, because it is a way of increasing one's own income without having to pay income tax and social security. It is therefore a good alternative to a salary increase - if the monthly €50 were fully exploited, that would still be €600 per year in addition to the wages. This motivates employees and enables them to save on private costs.
Employers can, on the one hand, deduct the benefits in kind as operating expenses and, on the other hand, bind employees to the company at low cost. Attractive arguments for joining the company can already be presented when you are hired. In other words: Employer branding is also strengthened . This is becoming more and more important nowadays, because companies outdo each other with the benefits they offer and for most employees, a fruit basket and free coffee at work are no longer enough. So it makes absolute sense to think carefully about which additional services offer a decisive advantage over the market competitors .
And this is where we come in:
Free chocolate in itself is a compelling reason to want to come to the office, isn't it? But what if you can do something good for the environment with every snack. With our products you can snack sustainably. Whether the call is taking too long, you're sprinting from meeting to meeting or you're just stuck in the afternoon slump - we've got you covered.
Made from purely natural, vegan organic ingredients, it not only tastes great, but is also good for all employees. Because we do without animal ingredients, sweeteners and cryptic ingredients.
Good nus: Our snacks can be financed through benefits in kind. 🙌🏻
Our chocolate bars , protein bars and fitness shakes are not only ideal snacks for the lunch break. Because they also give something back to the planet: Each product is packaged plastic-free and supports reforestation. Sustainable and delicious snacking has never been so easy. If that's not an incentive to work for a company ;)
These snacks should not be missing in any office:
- https://www.personio.de/hr-lexikon/geldwerter-benefit/#:~:text=nur%20ein%20tangible benefit-, What%20understands%20%20%20%20a%20monetary%20benefit%3F,free% 20Lunch%20in%20the%20canteen .
- https://www.fuer-gruender.de/wissen/unternehmen-fuehren/buchhaltung/lohnbuchhaltung/geldwerter- Vorteil/