The Tax Allowance of 44 Euros Per Month: How It Works
Nowadays, the job market is becoming more and more competitive. Companies have to stand out if they want to attract new employees. Many resort to various benefits.
In addition to staff meals, an office dog or free beer on Friday afternoon, there is a whole range of more classic options that fall into the category of non-cash benefits and are thus recorded differently for tax purposes.
These benefits can be divided into two categories: those who are tax-privileged and those who are exempt from all taxes. The former include, for example, company cars, a work mobile phone or a laptop. Tax-free benefits in kind include the tax allowance of up to € 44 per month.
Which benefits in kind are tax-free up to 44 euros per month?
Every company has the option of granting each employee (including part-time employees and temporary employees) benefits in kind of up to 44 euros per month tax-free - this is stated in §8 (2) sentence 11 EStG. Such contributions may be subsidies for public transport tickets, fuel vouchers or gift cards.
For the employee this represents the opportunity to receive additional benefits of up to 528 euros per year from his employer. If these consist of vouchers, he may even collect them and redeem multiple vouchers with one big purchase.
What makes it so attractive?
Anyone looking for the downside here will not find any, because if all conditions are observed, there are actually only advantages: Employees and employers both save on taxes, while the purchasing power increases.
For the employer, the tax savings are particularly significant: If he would pay the employee 44 euros net as a bonus, it would mean for him, taking into account all taxes and duties, a gross amount of 96 euros. A contribution in kind is therefore much more attractive and also a popular premium as well as a successful recruitment tool.
What should be considered?
Above all, it is important in the use of this non-cash benefit that the amount of 44 euros is not exceeded, because if that is the case, the entire amount is taxable.
Example: The employer would like to issue a fuel voucher for 50 euros. Then not only the 6 euros which are above the 44 euro mark, but the entire 50 euros taxed - and (according to §37 b EStG) with 30 percent! It is therefore advisable to ask the employee for a contribution of 6 euros, or to grant a benefit of 44 euros or less.
Furthermore, it should be noted that the employee may save up vouchers, but the employer can not cumulate the monthly amount - if he has not exhausted it in a month, this does not mean that he has a higher budget in the next month. However, within a month he can use various smaller amounts - for example, two vouchers of 22 euros each.
If shipping costs apply for an order for a benefit in kind, these are also to be added to the 44 euros. And by the way: If a cash transaction takes place - for example, a payment of 44 euros with the request to treat yourself to something nice - the tax exemption does not apply!
How can you save even more taxes?
The amount is not enough and you want to offer more to your employees? No problem, because gifts for certain occasions, such as the birth of a child or a jubilee, are exempt from these 44 euros. So you can grant an additional tax-free gift twice a year, provided the value does not exceed 60 euros.
In any case, it is important to keep an eye on all conditions, because errors can quickly become expensive. And you do not want to pay, but save - which should definitely be possible with this explanation!