How are non-cash benefits correctly taken into account in the payroll?
March 18, 2023 | 40,00 EUR | answered by Günther Tiefental
Dear Sir or Madam,
I work as a human resources specialist at a medium-sized company and I am responsible for the payroll of our employees. Lately, there have been an increasing number of questions regarding fringe benefits that have caused confusion. In addition to their monthly salary, we offer our employees fringe benefits such as fuel vouchers, meal vouchers, or company phones. These fringe benefits constitute an additional form of compensation that must be correctly accounted for in the payroll.
I am unsure about how exactly fringe benefits should be recorded in the payroll and if there are certain legal requirements or specific considerations that I need to be aware of. The question of the correct valuation of these fringe benefits also concerns me. I want to ensure that our employees are paid correctly and transparently, and that no errors occur in the recording of fringe benefits.
Could you please explain to me specifically how fringe benefits should be properly accounted for in the payroll? Are there any legal regulations or guidelines that I need to adhere to? What are the implications of fringe benefits on the social security contributions and tax burden of the employees? Are there perhaps software solutions or tools that can assist me in recording and calculating fringe benefits?
I thank you in advance for your assistance and look forward to your professional advice.
Sincerely,
Claudia Witzelmann
Dear Mrs. Witzelmann,
Thank you for your inquiry regarding the recording and consideration of non-cash benefits in the payroll of your employees. It is understandable that you are concerned about the correct handling of these additional benefits to ensure that your employees are paid transparently and correctly. I will explain in detail how non-cash benefits should be properly recorded in the payroll and what legal regulations and tax implications need to be considered.
First and foremost, it is important to know that non-cash benefits are generally considered as taxable benefits and thus subject to tax and social security contributions. Common non-cash benefits include fuel vouchers, meal vouchers, company phones, as well as non-cash bonuses or gifts. These non-cash benefits must be taken into account in the payroll with their taxable value.
The valuation of non-cash benefits is usually based on the provisions of the Income Tax Act. There are specific guidelines on how to determine the taxable value of non-cash benefits. For fuel and meal vouchers, for example, the actual value of the voucher is often used as the taxable benefit. Company phones have a fixed valuation, which also needs to be included in the payroll.
It is also important to note that non-cash benefits can affect both social security contributions and income tax. Social security contributions are increased due to the taxable value of non-cash benefits, while income tax is adjusted accordingly. Therefore, it is crucial to accurately record non-cash benefits to avoid incorrect calculation of social security contributions and income tax.
To assist you in recording and calculating non-cash benefits, I recommend using specialized software solutions or tools for payroll. These programs can help you accurately record, evaluate, and incorporate non-cash benefits into the payroll. This way, you can ensure that your employees' additional benefits are transparently and correctly accounted for.
In conclusion, it is important to stay informed about current legal regulations and guidelines to ensure that non-cash benefits are properly considered in the payroll. I am happy to assist you with any further questions and support you in the correct calculation of non-cash benefits.
Best regards,
Günther Tiefental
