How are tax-free benefits in kind treated in the payroll?
March 12, 2024 | 40,00 EUR | answered by Günther Tiefental
Dear tax advisor,
My name is Felix Schlüter and I work for a company that offers its employees tax-free benefits in kind, such as fuel vouchers or vouchers for sports events. However, I am unsure how these benefits in kind should be treated in the payroll and whether they are tax-relevant.
Currently, these benefits in kind are simply added to my gross salary, which makes me a bit uncertain. I wonder if these benefits in kind are indeed tax-free and whether they must be separately stated in the payroll. Furthermore, I am not sure if these benefits in kind have an impact on my tax class or tax rate.
I am worried that I may have to pay additional taxes if the benefits in kind are not handled correctly. Therefore, I would like to know from you how tax-free benefits in kind should be correctly treated in the payroll and if there are any special regulations or requirements that I need to consider.
Could you please explain to me how I can properly account for these benefits in kind in my payroll in order to avoid tax consequences? Thank you in advance for your help.
Yours sincerely,
Felix Schlüter
Dear Mr. Schlüter,
Thank you for your question regarding tax-free benefits in the payroll. It is important to handle these correctly to avoid tax consequences. Generally, benefits in kind, such as fuel vouchers or vouchers for sports events, are tax-free up to a certain amount.
The tax regulations for benefits in kind are governed by § 8 (2) of the Income Tax Act (EstG). According to this, benefits in kind up to an amount of 44 euros per month are tax-free. These tax-free benefits in kind must be shown separately in the payroll. If the benefits in kind exceed the amount of 44 euros per month, they become taxable and must be added to the gross salary.
In your current payroll, it appears that the tax-free benefits in kind are being offset against the gross salary. This is not correct, as the benefits in kind should be shown separately and not included in the gross salary. If the benefits in kind are incorrectly handled, there may indeed be tax payments due.
Benefits in kind typically do not affect your tax class or tax rate. They are only taken into account when calculating the taxable income. However, it is important to ensure that the benefits in kind are correctly recorded in your payroll to avoid tax consequences.
To properly account for tax-free benefits in kind in your payroll, I recommend contacting your employer or HR department. Request that the benefits in kind be shown separately and not offset against the gross salary. This way, you can ensure that the benefits in kind are handled correctly and no tax issues arise.
I hope this information is helpful and answers your question. If you have any further questions, please feel free to contact me.
Best regards,
Günther Tiefental
