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C. Tax-exempt payments by the employer

Which payments by the employer remain tax-exempt in the current payroll accounting?

  • Use of employer's facilities and premises — free of charge or at reduced price — which the employer makes available to all or specific groups of employees. This comprises e.g. recreation homes and health resorts, sports facilities or company libraries, as well as measures for health promotion and prevention, as far as these are covered by the range of services of public health insurance, as well as vaccinations.

  • Childcare grants up to a maximum amount of €2,000 per child and calendar year that the employer makes available to all or specific groups of employees. The employee must have received family allowance for the child for more than six months a year, and the child must not have reached the age of 14 at the beginning of the calendar year yet.

  • Voluntary contributions by the employer to the burial of an employee or of the spouse/partner or children of the same, who are entitled to more than six months of family allowance or support money deduction.

  • Benefits from attending company events up to €365 per year (company excursions, cultural events, company festivities, etc.) and the remunerations in kind received in such contexts, up to €186 per year, such as Christmas presents, gift vouchers or gold coins.

  • Payments by the employer to provident schemes (e.g. endowment insurances, life insurances, health insurances, shares in pension investment funds or contributions to pension funds) for all or specific groups of staff members (e.g. all wage-earners or all salaried employees) or to the works-council fund, up to €300 per year and staff member. This may also be in the form of converting remunerations into such retirement-plan contributions. This tax exempt amount may be claimed for every employer; it may thus also be claimed two or several times per year.

  • Voluntary social contributions of the employer to the works council fund and voluntary contributions to eliminate damage due to disasters.

  • Gratuitous or reduced-price transfer of staff shares in the employer's company to all or specific groups of employees up to €3,000. Such staff shares must be kept for five years before they ultimately become tax-exempt.

  • Employee profit-sharing scheme: Since 2022, employers can grant active employees a tax-exempt share of profits. The prerequisite is that it is granted to all employees or certain groups of employees. The earnings before interest and taxes under company law for the fiscal years ending in the last calendar year are used. The benefit amounts to up to €3,000 per year per employee.

  • Start-up employee profit-sharing scheme: Since calendar year 2024, there has been a tax benefit for start-up employee profit-sharing. If the requirements are met, the monetary benefit from the transfer of company shares to employees is not taxed when profit-sharing is granted, but — as a rule — only when the shares are actually sold.

  • Employee bonus: Allowances and bonus payments granted additionally by the employer in 2024 are tax-free up to an amount of €3,000 if the payment is made on the basis of a regulation on wages (e.g., collective agreement or company agreement). If both an employee profit-sharing payment and an employee bonus was paid by the employer in 2024, a total of only €3,000 can be treated as tax-exempt for both payments combined.

  • Free or reduced-price meals and beverages at the workplace. There are restrictions if food vouchers are handed out instead. Meal vouchers will remain tax-exempt to €8 per working day, food vouchers to the amount of up to €2 per working day.

  • Employee discounts: The term "employee discounts" describes benefits in kind from the free or discounted provision of goods or services offered by the employer or a group company affiliated with the employer in general business. Employee discounts are tax-exempt up to the following amounts:

    • Employee discounts up to 20% are tax-exempt (tax-exempt amount) and do not lead to remunerations in kind.
    • If the employee discount in the individual case exceeds 20%, overall an annual tax allowance of €1,000 is applicable, where the employer must disclose all discounts granted to an employee during a calendar year that exceed 20%.

Home office flat rate

To compensate for the costs arising from the home office activity, the employer can pay a so-called home office flat rate. Up to €3 per home office day can be paid out as tax-exempt for a maximum of 100 days in the calendar year 2024. A home office day exists if the professional activity is carried out exclusively at home on the basis of an agreement made with the employer. The term "home" does not only refer to the private home of the employee, but also to the home of close relatives (e.g. partner). If the total amount of €300 per year (€3/day × 100 days) is not used up, e.g. because the employer disbursed only €2 per home office day, then the difference is taken into account in the employee tax assessment if the home office days are indicated in the pay slip.

From 2025, the home office flat rate will be renamed telework flat rate. However, the requirements for tax purposes remain essentially unchanged.