What is the tax-free recreation allowance?

What counts as a recreation allowance / What forms of recreation can the employer subsidize?

How high are the tax-free amounts for the recreation allowance?

How is the recuperation allowance taxed?

How does the recuperation allowance differ from vacation pay?

When must the recuperation allowance be paid?

Is the recuperation allowance also available for mini-jobbers or part-time employees?

How much work is involved for the HR department and payroll department?

How do employers benefit from the recovery allowance?

What is the tax-free recreation allowance?

The tax-free recreation allowance is an additional benefit that employers can grant their employees. It is an allowance that employees can receive for various recreational activities. The advantage of the recreation allowance is that this amount remains tax- and social security-free for employees up to a certain amount.

What counts as a recreation allowance / What forms of recreation can the employer subsidize?

The recreation allowance may be used for all recreational purposes. The tax-free recreation allowance can therefore be used not only for vacation trips lasting several days, but also for day trips or wellness treatments. The responsible tax office determines which benefits are recognized. It is important that the employee submits proof.

The following examples are possible:

• Excursions,
• wellness treatments,
• hotel stays,
• autogenic training, massages, yoga etc.,
• admission to amusement parks, swimming pools, sauna parks or the zoo,
• free or discounted accommodation for employees in the employer's convalescent homes,
• use of the sauna, spa, and swimming pool at the gym — provided that this is billed separately and proof of the proportionate fees is available.

Medical treatments such as osteopathy or acupuncture are not eligible for subsidies.

How high are the tax-free amounts for the recreation allowance?

The maximum tax-free amounts are:

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

How is the recuperation allowance taxed?

The recuperation allowance is taxed at a flat rate of 25% by the employer. For employees, it is exempt from tax and social security contributions. Provided the annual tax-free allowance is not exceeded, employees receive the recreation allowance gross for net.

How does the recuperation allowance differ from vacation pay?

The recuperation allowance and vacation pay are different voluntary benefits paid by the employer that can be paid to employees at the same time. The difference is that the vacation allowance - regardless of the amount - must be fully taxed and subject to contributions. Accordingly, the employee only receives a portion of the additional gross amount of the vacation allowance. In contrast, the recreation allowance can be taxed as a lump sum up to a certain amount. For employees, it remains completely tax- and social security-free.

When must the recuperation allowance be paid?

The recuperation allowance must be paid at the earliest 3 months before the start of the leave and at the latest 3 months after the end of the leave. With Probonio, the recuperation allowance is paid directly and automatically with the salary payment in the following month, which means that employees can benefit from receiving the allowance quickly.

Is the recuperation allowance also available for mini-jobbers or part-time employees?

In principle, the recreation allowance can be granted to all employees, regardless of their level of employment. However, the decision lies with the employer and the internal guidelines.

How much work is involved for the HR department and payroll department?

Probonio was developed to significantly simplify the topic of employee benefits for companies while at the same time complying with the legal framework. Your personal contact will provide you with continuous support during the set-up process. Onboarding can be completed in a few minutes to a few days, depending on the size of the company. Once everything is set up, there are no regular tasks for the HR department.

Probonio can take care of the following tasks for you:

• Checking the evidence of the recovery measure
• Regularly checking the recovery allowance for legal requirements
• Preparation of legally compliant reports for your payroll accounting
• Personal support for your employees

In the case of onboarding and offboarding, new employees can be added or paused with just a few clicks. In addition, the creation of new employees can be automated with Probonio thanks to our interfaces to various HR systems.

Your payroll department or external tax office receives an import file for the desired payroll program (e.g. DATEV). Furthermore, there are no additional expenses on the payroll side.

How do employers benefit from the recovery allowance?

The recreation allowance offers employers an uncomplicated and cost-effective method of granting employees a tax-privileged allowance. The allowance is exempt from social security contributions and is only subject to a flat-rate tax of 25% by the company.

The increased annual salary helps to increase employee motivation and satisfaction and is an effective means of employee retention. By linking the additional payment to a recreational benefit, the company benefits both from the employees' recovery and from their increased productivity.

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, Probonio 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.