In the check: non-cash benefits instead of salary increases?
Monetary benefits are a form of remuneration that goes beyond mere wages and is not paid in money. Their value is determined by their usefulness in everyday life: company car, cell phone, etc. Often, such benefits in kind are tax-free for both the employee and the employer – and usually easier to negotiate than gross salary. The bosses of smaller companies in particular are more likely to agree to it.
Monetary benefit or more salary?
A higher gross salary for the boss also means: higher social security contributions. And for the employee, the question is: what is actually left after deducting taxes and social security contributions? An example: A single carpenter receives monthly gross 2.700 euros. He negotiates 70 euros more – but that's just under 36 euros net. In view of the rising cost of living, there is not much left over from the actual salary increase.
What is really worthwhile?
- Gas voucher and ticket: gas vouchers and tickets for buses and trains are among the most common non-cash benefits. They are tax and duty-free for both parties – however, in the case of fuel vouchers, the gross value may not exceed 44 euros per month.
With the flat-rate one percent rule, the list price of the vehicle at the time of initial registration is what counts. At 50.000 Euro, the monetary advantage is therefore 500 Euro per month. The employee pays income tax, solidarity surcharge, church tax (if applicable) and social security contributions on this amount. Half the list price applies to electric cars and plug-in hybrids purchased between 2019 and 2021.
- Bicycles/e-bikes: for tax purposes, company bicycles are treated like company cars. Half the list price applies to e-bikes that can go faster than 25 kilometers per hour and are purchased between 2019 and 2021.
- Company discounts: Employees are entitled to an annual "discount allowance" of 1.080 euros to – and this for goods or services that the company offers. This could be, for example, discounted flights for airline employees or discounts on in-house electrical goods.
- Smartphones& Computers: The boss can give technical devices to his employees as a gift, or he can give them to his employees as a gift. Get it cheaper and allow them to use it privately as well. This is usually tax-free if the employer pays a flat rate of tax on the monetary benefit and provides the employee with the device in addition to his or her salary.
- Company health promotion: A company can invest up to 500 euros per employee and year in this – for example, in exercise and nutrition programs. However, contributions such as for the sports club or the gym do not count as such.
IMPORTANT NOTE: Get advice!
Which extra is right for whom depends on the individual case. Depending on your tax bracket and personal situation, you should check in advance whether a monetary benefit is a good alternative to a salary increase. Ask your tax advisor or get information from the Lohnsteuerhilfe (income tax assistance). You can find an office near you via the advice center search.
The "non-cash benefits" mentioned here are only selected examples and do not represent a complete overview.