How are work bonuses taxed
Employee bonuses: motivating, but tax-free
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In order to give the motivation of the employees another kick towards the end of the year, employers can fall back on a well-tried method: the premium. However, if more money is simply paid, this must be taxed by the employee and employer. In the end, only part of the premium goes where it was originally intended - the rest ends up at the tax office. There are, however Alternativesto grant tax-free bonuses to employees. We show how to do it…
➠ Content: This is what awaits you
➠ Content: This is what awaits you
Employee bonuses: The advantages of the additional benefits
Of course, employees don't have to be from Benefit of a bonus be convinced. For them, the advantage is obvious: In addition to their normal remuneration, they also receive an on-top bonus. It goes without saying that it is gladly accepted, it motivates at least in the short term and acts like a Thank-you from the boss.
On the employer's side is that skepticism meanwhile bigger. After all, it is about additional costs that have to be generated. At first glance. There are but some advantages for companieswhich usually far exceed the cost of a premium:
The motivation increases.
Recognition of one's own performance with a bonus can noticeably increase employee motivation. In this way, employers can - ideally in addition to other feedback - express their appreciation for their employees. Anyone who notices that they are valued is also happy to do their best.
Employees are tied to the company.
Bonuses are also a good way of retaining talented employees in your company over the long term (PDF). Financial incentives alone are no longer sufficient in most cases, but there can still be an additional factor in the right direction.
Employers can save taxes.
A regular salary increase means a higher tax burden for employers and employees alike. However, if bonuses or other employer benefits are used, some of these can be granted tax-free and thus do not cause any additional costs that would have to be paid to the state.
Which employee bonuses can be granted tax-free?
The Why would be answered with that. But the question remains: How do you pay a tax-free employee bonus? After all, at the end of the day, the employee should also benefit from the special benefit and not have to give a large part back to the state as taxes ...
Indeed, these options exist. Here are a few ideas for Employee bonuses and benefits that can be granted to an employee tax-free:
Benefits in kind
There is one every month Tax exemption limit of 44 euros. This means that the employer can generally give his employees a tax-free gift every month, as long as this does not exceed the value of 44 euros. Since this is an exemption limit and not an exemption, the entire amount must be taxed as soon as the limit is exceeded.
Benefits in kind
Unlike benefits in kind, benefits in kind are granted for a specific personal occasion. In this case one also speaks of Attentions. The exemption limit for such attentions has been since January 1, 2015 60 euro. If the occasion arises, a benefit in kind can also be granted tax-free several times per month, for example in the form of a work lunch.
If the employee attends further training, the employer can reimburse the costs tax-free under one condition: The further training must in the interests of the employer lie. Means: If the employee acquires new or better skills during the training, from which the employer will benefit in the later work, the costs can be paid tax-free by the employer.
Here the employer has a tax-free allowance of 500 euros per employee. Subsidies to employees are also taken into account, which they do not invest within the company, but in external measures. Unfortunately, both sports clubs and contributions are for a Gym excluded. The situation is different, however, if a fitness studio, for example, offers measures that support the professional Requirements of the health insurance companies satisfy. These include, for example, programs to reduce the work-related lack of exercise or measures to cope with stress and relaxation.
If an employee gives children who are not yet of school age to a kindergarten during the day in order to have them looked after during his working hours, the employer can reimburse any costs incurred tax-free. This applies not only to facilities that belong to the company, but also to external kindergartens.
Depending on the industry, a company can also offer its employees a discount allowance on its own products of 1080 euros per year grant. This is possible for goods or services in which the company trades. For example, the manufacturers of food or cosmetics can leave these to their employees tax-free and at a reduced rate up to the corresponding discount limit.
Employee bonuses: even more suggestions and ideas
The most common form of employee bonuses - at least the tax-exempt ones - are still remuneration in kind and benefits in kind. Many a boss is in top form, becomes creative and finds a bonus with a high personal connection to the employee a pleasure to make and to demonstrate appreciation for his work. Great, that's the ideal case! But rarely. The majority find it difficult to choose the courtesies and rewards. In that case, many then fall back on highly specialized service providers for employee bonuses, such as Sodexo Benefits. They usually offer so-called Shopping passes with which the award-winning employees then - as part of the Credit - be able to buy something, refuel or go out to eat.
You can do it like that. But it is better if bosses choose a few ideas themselves, hand them over ... because that always includes them two sub-messages stuck:
- I have a piece of mine for you Lifetime taken.
- Because you give it to me value are.
Every employee feels this instinctively. And so can one handwritten postcard sometimes have a more motivating and lasting effect than a fuel voucher. On top of that, it is tax-free.
If you have any ideas, suggestions or experiences in this regard, we look forward to your comments in order to add to the following list. It contains a few suggestions to provide guidance and food for thought motivating employee bonuses should serve:
- A handwritten one letter
- A personally selected (listening)book
- A Bunch of flowers for the partner at home (because the employee often stays in the office longer)
- A basket with Delicacies
- A free one day off extra
Nils Warkentin studied business administration at the Justus Liebig University in Giessen. In the career bible, he is devoted to topics related to studying, starting a career and everyday office life.
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