Employer, this is how the taxation of employee benefits works

The versatility of tax-supported employee benefits also extends to the way they are offered, so that every company can find the best way to support their well-being for themselves and their employees – both at work and in their free time. Continue reading and choose the benefits and ways that suit you best!

How to offer lunch benefit

25% of the lunch benefit is tax-free, which makes it a cost-effective and affordable way to support the well-being of employees. The amount of the lunch benefit is based on the monthly number of working days. As an employer, you can decide whether to offer the benefit as a fringe benefit or as a lunch deduction within the framework of the values determined by the Tax Administration.

Either way of offering a lunch benefit makes lunch more affordable for the employee and supports his versatile eating, restoring and giving energy for the working days. Thanks to the lunch benefit, an employee can at best save up to more than 500 € in a calendar year.

Lunch benefit as a fringe benefit

The lunch benefit offered as an in-kind benefit is taxable earned income and is treated as a salary. The taxable value of the benefit is added to the salary, whereby income tax is paid according to the personal tax rate. The benefit in kind is therefore comparable to a salary increase. The employer pays the nominal value and employer contributions for only 75% of the lunch benefit but can deduct these expenses in taxation.

Example: The employer offers the employee a lunch allowance of €200 per month. The taxable value of the benefit 0,75 x 200 € = 150 € is added to the employee's salary. The employee pays tax according to his personal tax rate of 150 €. The employer pays €200 for the benefit + employer contributions for 75% (e.g. 150 € x 22,5% = 33,75 €).

Lunch benefit as a lunch deduction

The lunch deduction is a cost-effective way of providing the lunch benefit. The deduction involves the employee paying at least the 75 % taxable value of the benefit; however at least 8,50 € / meal. In the best case scenario, this means that the employee gets lunches at a 25 % discount if employer offers them a full lunch benefit of 13,50 € in 2024.

The employer provides an employee with a lunch benefit of 21 working days a month. The employee pays 21 x (0.75 X 13.50) = € 212.63 of the benefit, which is deducted from the employee’s pay. The employer only pays 25 %, i.e. 21 x (0.25 X 13.50) = € 70.86, for the benefit and can deduct this in taxation.

How to offer sports and culture benefit

The Tax Administration has determined that companies can offer their employees a sport and culture benefit, i.e. Edenred Virike, tax-free according to the annual maximum limits The employer can offer its staff the entire benefit, or the employees can pay a portion of the benefit.

Exercise and culture benefit with 0% deductible

The employer can offer sports and cultural benefits according to the annual maximum limits, so that the employee has no deductible at all, i.e. it is completely free of charge for the employee. The employer can deduct the amount of the Virike benefit paid in taxes.

Sports and cultural benefits with the employee's deductible

The employer can also offer sports and culture benefit with the employee's deductible, which is deducted from the employee's salary. The deductible amount and the amount of the Virike benefit can be completely determined by the employer (within the maximum amount of the Tax Administration).

Example: The employer decides to offer a Virike benefit of 300 €/employee so that the employee has a 20% deductible. 60 € (20% x 300 €) is deducted from the employee's salary and he is given a 300 € incentive balance. The employer can only deduct the amount of the Virike benefit they paid, i.e. 240 €.

How to offer commuting benefit 

The tax administration determines tax-free, annual maximum limits for the commuting benefit. The value in question includes a possible bicycle benefit. The commuting benefit can be offered to employees on the same principle as the sports and culture benefit.

How to offer massage benefit

The Tax Administration determines that the massage benefit is tax-free when it is offered normally and reasonably, check the current value of Edenred's massage benefit here The massage benefit can be offered to employees on the same principle as the sports and culture benefit.