Basics and interesting facts about the “recreation allowance”

Activation of the benefit

Deactivating the benefit / changing the configuration

Integration into payroll accounting

Receipt verification in the employer portal

Legal basis and information

 

Basics and interesting facts about the “recreation allowance”

The recreation allowance is a voluntary additional benefit provided by the employer as a tax-free subsidy towards an employee's recreation costs. This allowance can be used for various recreational activities, including a vacation at home or another type of recreation. The purpose of this allowance is to promote employee recreation and thus contribute to improving the working atmosphere and performance.

Tax treatment

The recreation allowance is tax and social security exempt up to a certain amount. These limits are currently:

• 156 euros for the employee themselves,
• 104 euros for the spouse or registered partner,
• 52 euros per child.

Certain conditions must be met for the recreation allowance to remain tax-free:

1. Direct earmarking: The allowance must clearly be used for recreation and not for other purposes such as further education or health measures.
2. Temporal connection: The payment should be in temporal connection with the vacation.
3. Obligation to provide receipts: The employee must be able to prove the costs of the leave by providing appropriate receipts.

Activation of the benefit

The “Recreation allowance” benefit can be activated for employees in the employer portal.

To do this, click on the desired employee and select “+ Configure now for 1 employee”

Tip: To select all employees collectively, check the box to the left of “Employees”.

Add your desired details in the new pop-up window and complete the configuration by clicking on Activate.

If you do not select an end date, this benefit is available indefinitely.

Please ensure that all information about the employee regarding marital status and children is entered correctly in order to activate the correct amount.

To do this, go back to the overview column and call up the “Employees” section (under “Dashboard”). Select the relevant employee and click on the pencil icon to edit the information. Click on Save to apply the changed data.

Once these steps have been completed, you can now also see the budget available to the employee.

Deactivating the benefit / changing the configuration

If an employee should no longer have access to this benefit, you can change this at any time in the employer portal.

To do this, go to “Recreation allowance” and then to the “Benefit active” tab

Now click on the desired employee and select “Change configuration for 1 employee”

Add your desired details in the new pop-up window and complete the configuration by clicking on Confirm.

If you want to change the configuration, first click on “Change options”. Here you will be informed that the configuration must be adjusted via the employee profile.

To do this, go to the dashboard under “Employees”, select the relevant employee and click on the pencil icon next to the benefit “Recreation allowance” to adjust the data.

A pop-up window will now appear in which you can adjust the information regarding marital status, children or the period in which the benefit is to be granted.

 

Integration into payroll accounting

As an employer, you are required to include the recreation allowance on the pay slip in the month in which it was paid.

This is important for several reasons.

• Transparency: Listing the recuperation allowance on the payslip ensures transparency and clarity for the employee/employer, who can understand the amount received
• Documentation: It is necessary to properly document the recreation allowance in order to prove the correct handling and payment in the event of possible tax audits
• Tax treatment: Even if the recreation allowance is tax-free up to the specified maximum limits, amounts in excess of this must be treated as income subject to tax and social security contributions and reported accordingly.

To ensure complete documentation, you can set up the wage data export automatically.

To do this, go to “Recreation allowance” under “Wage data export”, where you can integrate your payroll accounting system.

If the accounting system has been changed, please contact Probonio Support and we will make the change for you. You can then enter all information on wage types and e-mail addresses etc. yourself for the respective benefit.

Important: For the integration of the payroll accounting system, you need information such as the wage type (de: Lohnart); ask your tax office for this.

Up to three e-mail addresses can be stored for monthly dispatch.

Be sure to check the box “Automatically send me the payroll data reports by e-mail every month”

If a tax audit is required, you can access the CSV file (detailed report).
To do this, go to “Receipts”, select the relevant month and click on the CSV file icon.

Enter your desired details in the new pop-up window and complete the download by clicking on Download.

 

Receipt verification in the employer portal

Probonio continues to offer the voucher verification service for your company. In addition, employers have the option of checking receipts themselves. This option allows you to process receipts yourself at any time, based on your individual decisions.

Please note: As the independent check is carried out by the employer, there is no need for a check by our receipt check team.

To be able to check receipts, go to the “Recreation allowance” tab in “Receipts”. Here you can select the current month and check the receipt using the receipt icon on the right.

The receipt now appears on the right-hand side. You can now decide whether you want to reject or accept this receipt.

Important: As soon as you check the vouchers yourself, they will no longer be checked by Probonio.

Select one of the two options.

Important: If you reject a voucher, a reason for rejection is required so that you can continue.

The document is now displayed with Document released / Document rejected. The check is now complete.

If required, you can also accept/reject vouchers that have already been checked by Probonio. To do this, select the voucher icon at the end of the line again. Here too, the receipt appears on the right-hand side and can be edited accordingly. Important: If you reject a voucher, a reason for rejection is required so that you can continue. As soon as you check the vouchers yourself, they will no longer be checked by Probonio.

 

Legal basis and information

Wage tax: The classification of recreational allowances as wages is based on § 19 EStG.. The flat-rate wage tax rate of 25% is regulated in § 40 Abs. 2 Satz 1 Nr. 3 EStG 

Social insurance: § 14 Abs. 1 Satz 1 SGB IV defines the remuneration from employment that is subject to social insurance contributions. § 1 Abs. 1 Sätze 1 und 2 SvEV stipulate that wage tax-free or flat-rate taxed remuneration components that are granted in addition to wages or salaries do not constitute remuneration subject to social security contributions under certain conditions.

Further information at http://www.haufe.de

 

Translation Note: This article has been translated using automatic translation software to provide the reader with a basic understanding of the content. Despite reasonable efforts to provide an accurate translation, we cannot guarantee its accuracy.

If there are any questions regarding the accuracy of the information in the translated article, please refer to the German version of the article, which is the official version.