How do I proceed if an employee is supposed to receive tax-free supplements?
March 20, 2023 | 30,00 EUR | answered by Christiane Rapp
Dear tax consultant,
My name is Benjamin Ullmann and I am the managing director of a medium-sized company. In our company, some employees work in shifts and on weekends. Now we would like to pay these employees tax-free supplements to honor and make their working hours more attractive.
Currently, however, we are unsure how to proceed correctly from a tax perspective. We want to ensure that we correctly consider the supplements in the payroll to avoid problems with the tax office. Additionally, we want to ensure that our employees actually receive and benefit from the tax-free supplements.
Therefore, my question to you is: How should I proceed if an employee is supposed to receive tax-free supplements? What legal requirements do we need to consider, and how can we ensure that the supplements are calculated correctly?
I appreciate your support and thank you in advance for your expert advice.
Kind regards,
Benjamin Ullmann
Dear Mr. Ullmann,
Thank you for your inquiry regarding tax-free supplements for your employees who work in shifts and on weekends. It is commendable that you want to provide your employees with these supplements as recognition for their special working hours. In order to proceed correctly from a tax perspective and avoid any potential issues with the tax authorities, I would like to provide you with some guidance.
In general, supplements for Sunday, holiday, and night work can be paid tax-free to employees if they are required by law or a collective bargaining agreement. The tax-free supplements must not exceed certain limits in order to be considered tax-free. For Sunday work, for example, the tax-free supplement is 50% of the base wage, for holiday work 125%, and for night work between 8 pm and 6 am 25%.
To ensure that the supplements are correctly calculated, it is important that you adhere to the legal requirements for tax-free supplements. You must separate these supplements in the payroll as separate items and label them accordingly. It is advisable to keep precise documentation of the hours worked and the supplements paid, in order to be able to demonstrate, in case of a tax audit, that everything was calculated correctly.
If you are unsure about how to correctly account for the tax-free supplements in the payroll, I recommend seeking assistance from an experienced tax advisor or payroll accountant. They can help you properly calculate the supplements and ensure that your employees receive the tax-free supplements they are entitled to.
I hope this information is helpful to you and I am available for further questions. Thank you for your trust and I wish you and your company continued success.
Best regards,
Christiane Rapp
