Monetary advantage
Monetary advantage in payroll accounting
At first glance, the correct calculation of the non-cash benefit seems like a real challenge. But appearances are deceptive. There are a few important basic rules that need to be observed:
- Non-cash benefits of up to €44 per month are tax-free.
- The non-cash benefit in relation to the company car is based on the logbook or the 1 percent rule.
- Employee discounts are tax-free up to 4% of the discount (maximum €1,080 per year).
How the 1 percent rule works
In the following, we would like to explain how the so-called 1 percent rule works. In return for the private use of a company car, the employee pays tax on 1 percent of the gross domestic list price each month.
In addition, the employee pays a monthly tax of 0.03 percent of the gross domestic list price per kilometer of travel between home and work.
These two rules then result in additional income. This is added to the salary for purely tax reasons, but is not paid out. This additional contribution is only used to correctly calculate the additional tax and social security contributions.
A sample calculation follows:
Income: 4,000 € gross / month
New car price € 40,000
1 % of the new price
40.000 x 1 % = 400 €
Distance from home to workplace: 40 kilometers
New price x kilometers x 0.0003
40,000 x 40 x 0.0003 = 480 €
This calculation now results in a non-cash benefit of € 880. The calculated amount now increases the income and therefore a total of € 4,880 is taxable instead of the previous € 4,000.
When are non-cash benefits tax-free?
If the benefit in kind is primarily in the interest of the company, then a non-cash benefit is always tax-free.
Many companies now offer meal vouchers or discounted lunches in their own canteens. Tax law stipulates so-called non-cash benefits values for this. This stipulates, for example, that a lunch or dinner may have a maximum value of €3.23. If you as an employer issue meal vouchers to your employees, their value may be a maximum of €3.10 higher than this amount stipulated by tax law.
The additional €3.10 is tax-free for employees.
By the way: If you as a company provide fruit, mineral water, juices, coffee etc. free of charge, this does not constitute a non-cash benefit.
Disclaimer
Please note that the texts on this website and the related contributions are provided for general informational purposes only and do not constitute tax or legal advice in the proper sense. For individual cases, we always recommend seeking specific legal advice tailored to the circumstances of the situation. The information is provided to the best of our knowledge and belief, without any guarantee of accuracy, completeness, or validity.
