Doing nothing is expensive: How companies can combine benefits to save costs and taxes.
Corporate benefits are a practical tool for employers if they want to improve employee satisfaction, retain current employees and attract future employees to the company when recruiting.
‘Employee benefits are usually part of the overall package of employee remuneration and motivation and are intended to promote employee satisfaction, well-being and loyalty to the company.’
Companies even have various options for offering their employees several benefits at the same time while saving on non-wage labour costs - in the following we show which benefits these can be.
In contrast to a salary increase, mobility benefits are generally tax-privileged or even completely tax-free (e.g. journeys on public transport). The forthcoming introduction of a flat-rate tax on mobility budgets will provide employers with a further opportunity to offer their employees tax-privileged, flexible mobility benefits.
‘With the mobility budget, employees receive a monthly credit for mobility from their employer, which they can use flexibly for the mobility services of their choice.’
In future, companies will be able to tax mobility budgets for the use of mobility services outside of work at a flat rate of 25% up to an upper limit of €2,400 per year and employee. The mobility budget must be granted in addition to the salary. The mobility budget can be used, for example, for new forms of mobility such as car sharing, e-scooters and ride-hailing, which were previously not tax-privileged. The new regulation is intended to allow uncomplicated taxation and extends existing incentives to promote climate-friendly mobility (e.g. job ticket, company bike).
Compared to a salary increase, taxation is often lower as a result. Employees receive a net wage optimisation. Companies can often save on non-wage labour costs.
Flat-rate taxation reduces tax complexity and minimises bureaucracy, as receipts no longer need to be checked individually. Employees benefit from a tax exemption, as the flat-rate taxed inflows are gross and net. Companies can introduce mobility budgets as a benefit more easily and flexibly, which is particularly advantageous for SMEs.
Since 2019, job tickets can be given to employees tax-free (in accordance with Section 3 No. 15 EStG) and thus make company mobility more climate-friendly. This means that employers no longer have to claim the benefit in kind, which can be used for other financial allowances below the 50 euro exemption limit for employees. Employers must grant the job ticket in addition to the wages owed.
Employer travel allowances for tickets purchased are just as tax-free as completely free or discounted public transport tickets for travelling to work. As these are usually monthly or annual travelcards, employees can also use them for private purposes.
Since May 2023, employers have also been able to subsidise the Deutschlandticket or 49-euro ticket tax-free or even pay for it in full. Companies proceed as follows for the tax-free Deutschlandticket as a job ticket: As a salary supplement via reimbursement with the salary. Employees purchase the Deutschlandticket themselves and receive a reimbursement of the ticket costs from their employer as an additional salary via their pay slip.
Company bike via salary conversion
Company bikes are usually provided by the employer in the form of salary conversion. This means that employees waive part of their gross salary and receive the company bike in return. In this way, part of the salary is converted into a benefit in kind. Firstly, the leasing instalment reduces the gross salary, which reduces the tax burden. Then one per cent of the gross list price of the bicycle is added back to the salary. The non-cash benefit does not apply to salary conversion.
Company bike as a salary extra
The second option for employers to provide their employees with a company bike or e-bike is to provide a bike in addition to the salary already owed. The company bike is then exempt from tax and social security contributions for the employee. Employers can also claim the entire costs as business expenses.
More and more companies are recognising the importance of balanced meals in the workplace and are therefore offering their employees the opportunity to benefit from a meal allowance.
Employers grant their employees a subsidy in the form of digital meal vouchers or credit loaded directly onto a card, which employees can use to buy their meal during their lunch break. Depending on the amount of the subsidy, employees can have one or even several meals a day.
With the meal allowance, employers can reimburse their employees up to €7.23 tax-free for lunch each day. The allowance applies to the workplace and home office. A total of up to €1,242 per year is tax-privileged.
The tax-free 50 euro benefit in kind is one of the most popular and best-known employee benefits. Employers can choose the right benefit for them and their employees from a large pool of different benefits.
Possible benefits within the scope of the 50 euro benefit in kind include any goods and services, vouchers for the purchase of goods and services and also credit cards that serve as a means of payment.
Examples of benefits in kind are
Disclaimer: NAVIT is not liable for the accuracy of the information. The information does not constitute tax advice and in no way replaces individual advice from a tax consultant.
