Basic information and useful facts about benefits in kind 37b

Configuring the benefit

Activating the benefit

Deactivating the benefit / changing the configuration

Overview of Benefits in Kind 37b

Integration with payroll accounting

Legal basis and information

FAQs on Benefits in Kind 37b

Basic information and useful facts about Benefits in Kind 37b

Configuring the benefit

Activating the benefit

The “Benefit in Kind 37b” can be activated for employees in the employer portal.

To do this, go to “Employee Master data” and select the desired employee.

Then you can select “Add Benefit” in the top right-hand corner and choose “Benefit in Kind 37b.”

Enter the desired information in the new pop-up window and complete the configuration by clicking on “Create.”

Tip: Check the box “Inform employees also by mail” so that they also receive a reminder to select a voucher if push notifications are not active.

Please note: The voucher must be selected in the same calendar year. If this does not happen, the stored security voucher will automatically apply on December 31st around 5 pm UTC. If no security voucher has been stored, a Rossmann voucher will be issued.

You can set up the Benefit in Kind 37b for several occasions. At the top, you will always see the maximum amount that can still be set up for the Benefit in Kind this year.

Deactivating the benefit / changing the configuration

If this benefit was set accidentally or incorrectly, or if the employee is not supposed to receive it after all, you can delete it by clicking on the trash can icon or edit it using the pencil icon.

Overview of Benefits in Kind 37b

Under “Gift cards” and “Benefit in Kind 37b” you will find a list of what has currently been received or is planned for the future.

Integration with payroll accounting

To ensure complete documentation, you can set up automated payroll data export.

To do this, go to “Gift cards” (or “Flex budget”) and select the sub-item “Payroll export.” Here you can first specify your payroll accounting system.

Important: To integrate the payroll accounting system, you will need information such as the wage type. Ask your tax office or payroll department for this information.

Up to three email addresses can be stored for monthly mailings.

Note: Be sure to check the box “Send me the payroll reports for each month by email” if you want automated delivery.

If a tax audit is conducted, you can access the CSV file (detailed report) at any time to submit it.

To do this, go to “Gift cards” and then to “Orders” in the submenu, click on the icon on the right, and select the relevant period.

Legal basis and information

Income tax: The flat-rate taxation of Benefits in Kind to employees or third parties (e.g. business partners) is regulated in Section §37b EStG. Employers can pay a flat-rate income tax of 30% instead of individual taxation of the recipient. This regulation serves to simplify the treatment of gifts that are granted in addition to wages.

Social security: If §37b EStG is applied and the flat-rate tax is paid by the employer, the benefit is not considered wages subject to social security contributions, as it is not allocated to the individual employee's wages but is subject to separate flat-rate taxation. Therefore, no social security contributions are payable.

Important:

• This must be an additional benefit – salary conversion is not permitted
• The employer must document the benefit in full (recipient, occasion, type, value)

Limits and obligations:

• Maximum of 10,000€ per recipient per calendar year
• If this amount is exceeded, the flat rate for the entire benefit no longer applies
• The tax is paid by the employer as part of the income tax return and cannot be transferred to the recipient

Further information:

haufe.de – Die pauschale Lohnsteuer nach § 37b EStG

Note: This information is for general guidance only. A binding and legally secure tax assessment can only be made by the relevant tax office or a tax advisor.

FAQs on Benefits in Kind 37b

What is the difference between §37b EStG and tax-free benefits in kind (§8 section 2 EStG)?

§37b EStG allows for the flat-rate taxation of Benefits in Kind provided by the employer (e.g. gifts, invitations), while §8 (2) EStG allows for tax-free Benefits in Kind up to €50 per month. The two regulations cannot be combined - a benefit may only be assigned to one regulation.

Who is eligible for benefits under §37b EStG?

Both

• Employees and
• Business third parties (e.g. customers, business partners, freelancers)

The application must be decided separately for each recipient group and implemented uniformly.

Which benefits fall under §37b EStG?

Examples:

• Vouchers or Benefits in Kind worth more than 50€
• Invitations to events (e.g. concerts, sporting events)
• Incentives or bonus trips
• Promotional gifts of higher value

What is the maximum amount of the benefit?

The flat-rate allowance under §37bEStG is only permissible if the total value of all benefits per recipient and calendar year does not exceed 10,000€ (gross, including tax).

What happens if the 10,000€ limit is exceeded?

In this case, the flat-rate allowance does not apply to the entire benefit. The monetary benefit must be taxed individually—for employees via payroll accounting, for third parties via income tax, if applicable.

Does the recipient have to pay the flat-rate tax?

No. The flat-rate income tax (30% plus solidarity surcharge and, if applicable, church tax) is paid in full by the employer and is deducted via the payroll tax return.

How is the application documented?

The following information must be recorded for each benefit:

• Name of the recipient
• Reason for the benefit
• Type and value of the Benefit in Kind
• Date of transfer

This information also serves as proof for the tax office.

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.