Posted 04 Feb 2020
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This year there are some innovations for tax breaks in Germany! For starters, the 44-euro rule and the associated monetary benefits. 2020 is all about electromobility, which the state is now favoring more for tax purposes. In addition to increased purchase premiums for electric cars, employees and employers will also benefit from further tax exemptions and special depreciation. In our overview the best monetary benefits in 2020, includes the changes for material expenses and the 44 euro rule. We have put together for you exactly what the tax changes are with an emphasis for companies.
What is a Geldwerter Vorteil?
A Geldwerter Vorteil or monetary benefit is defined as all the material expenses that an employer provides to its employee at a reduced price or free of charge. According to §8 of the income tax law, the non-cash benefit associated with a material expense is basically an income and is therefore considered income that is subject to tax and social security contributions. However, benefits in kind are tax-free up to the exemption limit of 44 euros per month. In addition, they have to be taxed, whereby the state promises various tax benefits depending on the material costs. The potential taxable benefits in kind include, for example, a company car that an employer makes available to his employee for private use. For the taxation of a company car, the employee has the option of a logbook in addition to the so-called 1 percent rule.
Other material expenses include reduced tickets for using public transport, fuel or meal vouchers and the provision of a so-called mobility budget. With the help of a defined budget, the mobility budget, every month employees can freely decide which means of transport to use to get to and from work without having to pay for it themselves. In many cases, allocating a mobility budget replaces the provision of a company car and also offers significantly more flexibility. While the company car must be taxed by the employee for professional and private use at the same time, the granting of a mobility budget is only taxable by the employer. For the relevant employee, this means that he / she is completely free to decide what he / she wants to use the budget for. Environmentally friendly means of transportation such as e-bikes, e-scooters or public transport such as buses and trains have become particularly popular. But the range of car sharing is also growing in popularity among entrepreneurs, since the vehicles only have to be paid for if the employees use them.
Are there other options for the monetary benefit?
There are countless ways to benefit from the monetary benefit. In addition to staff discounts and special regulations on the use of bonus miles earned on business, companies can also offer their employees health, fitness and prevention courses up to a certain amount tax-free. In addition, employers have the option of offering company apartments, the cost of childcare for their employees and discounted or even free meals in the company's canteen. The use of leasing offers such as electric scooters or electric bicycles is also covered by the monetary benefit, as is the private use of IT equipment or the issue of vouchers.
Who benefits from a monetary benefit?
Both employers and employees benefit from the monetary benefit. While the wages at the end of the month consist primarily of cash benefits, more and more companies are strengthening their employer branding, i.e. their brand and status as an employer, with the help of additional employee offers. These so-called corporate benefits should serve as an incentive for existing as well as potential new employees in order to position themselves on the market and at the same time stand out from the competition. Thanks to tax-free as well as tax-reduced additional services, companies score above all by offering employees a kind of extra remuneration without reducing their actual wages. For employees, this means that they get more for their work, albeit in kind. For employers, such employee offers serve on the one hand as an attractant and on the other hand as a possible unique selling point vis-à-vis competing companies.
How is the taxation of the monetary benefit calculated?
Numerous computers for calculating the monetary benefit for non-cash benefits can be found on the Internet. What is decisive is how high the monetary benefit is for the individual employee and what material expenditure he or she receives from his employer. In general, however, the following applies: Above the annual allowance of 1,080 euros, the monetary benefit is always subject to tax. First of all, it needs to be converted into money. After all, only those benefits in kind fall under the regulation of the monetary benefit for which the employee has to pay money in order to claim it. Free drinks such as water, coffee or your favorite drink are not included.
We at ePilot have made it our business to know the tax benefits and benefits for non-cash benefits down to the smallest detail so that we can advise companies in detail. Whether as a material expense for the employer or listed on the employee's payslip - we know how you can best use the monetary benefit for your company and your employees. From the Bahncard 100 to fuel vouchers and restaurant passes to the provision of a mobility budget to the purchase of electric bicycles for your employees, we will tell you how you can best embrace the monetary benefit.