Can I as an employer provide tax-free benefits in kind to my employees?
July 20, 2022 | 40,00 EUR | answered by Claudia Köhler
Dear tax advisor,
My name is Alwin Becker and I am the managing director of a medium-sized company. In the past, we have offered our employees tax-free benefits such as fuel vouchers or meal vouchers. Due to the current economic situation, we need to save costs and are considering continuing this practice. However, I am unsure if this is still allowed from a tax perspective and what requirements need to be met.
Currently, we are in a situation where we want to offer attractive benefits to our employees to retain them long-term. At the same time, we also want to ensure that we are on the safe side tax-wise and do not have to make unexpected tax payments.
Therefore, my question to you is: Can I, as an employer, provide tax-free benefits to my employees and what requirements need to be met for this? Are there possibly alternatives to benefits that are more tax-efficient? I would greatly appreciate it if you could assist me with this question.
Thank you in advance.
Kind regards,
Alwin Becker
Dear Mr. Becker,
Thank you for your inquiry regarding tax-free benefits in kind for your employees. As the managing director of a medium-sized company, it is understandable that you want to inform yourself about the tax aspects of such benefits in order to offer attractive perks to your employees and to be on the safe side tax-wise.
In principle, it is possible to grant tax-free benefits in kind to your employees. However, there are certain conditions that must be met for these benefits to remain tax-free. Common tax-free benefits in kind include, for example, fuel vouchers or meal vouchers. These benefits are exempt from income tax under certain conditions.
An important requirement is that the benefits in kind must be granted in addition to the regular salary owed. This means that the benefits in kind must not be paid instead of cash payments, but rather as an additional benefit to the regular salary. In addition, the benefits in kind must adhere to certain maximum limits in order to remain tax-free.
An alternative to tax-free benefits in kind are tax-free employer subsidies, for example. These subsidies can be granted for specific purposes such as childcare or further education, and are tax-free up to a certain amount. However, certain conditions also apply in this case that must be observed.
It is advisable to seek advice from a tax advisor to ensure that the benefits granted are treated correctly for tax purposes. A tax advisor can inform you about the current tax regulations and help you find an optimal design for the benefits for your employees.
I hope that this information has been helpful to you. If you have any further questions or require individual advice, I am at your disposal.
Best regards,
Claudia Köhler
