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Tax regulations for attentions
The most important question is whether occasion-related gifts are tax-free at all. In principle, gifts in kind up to an amount of 60 euros per occasion (e.g. wedding, birth of a child, promotion, farewell) per employee:in are tax-free. These are non-cash benefits that are paid in addition to the regular salary and may not be paid out in cash or to the account. However, exceptions must also be taken into account, for example if it is a bonus for a special achievement or the attention is in connection with an anniversary or a company event.
The Regional Hero Card as a tax-free option
One option for companies is to use the Regional Hero Card. Employees can use this tax-free non-cash benefit card to make purchases at any Mastercard acceptance point and thus decide for themselves what gift they would like to give themselves. Whether it's a T-shirt from their favorite store around the corner, a visit to a concert or a meal in a restaurant - the Regional Hero Card offers a wide range of choices within the respective region. Even monetary gifts for special personal occasions can be easily covered by the Regional Hero Card. In this way, companies can give their employees great pleasure without having to worry about the tax aspects.
Monetary benefits for higher amounts and flat-rate taxation
In the case of higher amounts, the gifts must generally be taxed as non-cash benefits. This means that the gift is considered part of the taxable income of the employee and therefore social security contributions are also due. § Section 37b of the German Income Tax Act (EStG) states, however, that an employer can also pay income tax on non-cash gifts to employees of up to EUR 10,000 via the flat tax rate of 30%. In addition, there are social security contributions, the solidarity surcharge, if applicable, and church tax.
Attention in the form of dinner
A dinner with employees can be considered a courtesy if it takes place in a reasonable setting and on an irregular basis. It should be noted that this may not be a regular meal allowance. As a rule of thumb, a meal is tax-free up to an amount of 60 euros per person and occasion. However, there are exceptions to this, for example if the meal is in connection with a company event. If the amount is higher, the non-cash benefit must be taxed. It is advisable to obtain tax advice beforehand for larger amounts in order to avoid possible tax traps.
Summary and conclusion
In summary, it can be said that attentions for employees are a good way to express appreciation and to increase employee motivation. However, it is important to observe the tax regulations and to make sure that they are voluntary benefits. The Regional Hero Card allows for easy and flexible management of gifts, so that companies can give their employees a great pleasure without having to worry about the tax aspects.
You don't use the Regional Hero Card in your company yet? Contact our team and we will show you how you can offer our Regional Hero Card as an attractive corporate benefit!
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