Which ordinary employee expenses are not taxable to a company?

Companies often wonder which employee expenses can be paid freely without additional tax burden. In this article, we will look at the main ordinary types of income that are not subject to personal income tax (PIT) by law.

Use of personal vehicle for work purposes:

Direct compensation

For employees who use their personal car for work purposes, the employer may pay a tax-free compensation. According to Article 9, paragraph 16 of the law, the amount of compensation is 0.08 euros for each kilometer driven, but not more than 115 euros per month. In order for this compensation to be paid, it must be clearly stated in the employment contract that the car is used for work purposes, and the kilometers driven must be recorded in the route sheets.

Loan agreement up to 15 days per month

If the car is loaned out for free use for up to 15 days a month, there is no direct compensation, but the company may cover fuel and other expenses related to the car during the loan period. Kilometers driven for work purposes must be accurately recorded using route sheets.

Loan for more than 15 days per month

In this case too, direct compensation is not provided, but all expenses related to the car, such as repairs, fuel, insurance and tires, can be covered. In this case, the company must register the SIA as the car keeper with the CSDD and pay the company car tax. Route sheets are not required with justification for each trip, but the liters of fuel consumed must be recorded.

Car rental

An employee can rent his car to the company and receive a rental fee, from which only 10% tax is withheld. In this case, the company must also register the SIA as a car keeper with the CSDD and pay the company car tax. Route sheets are also not required, but the fuel consumed must be recorded.

Other freely usable tax-free income and compensations:

Compensation for remote work

Employees can be paid up to 40 euros per month in proportion to the hours and workload of remote work.

Contributions to life and health insurance, pension funds

Employees can contribute up to 10% of their salary to life and health insurance or pension funds. These contributions must meet certain conditions to be tax-free.

Gifts for employees

Gifts up to 100 euros per year are not taxable. This can be a good way for a company to motivate employees without additional tax burden.

If you would like to learn more about tax-exempt income or receive professional advice, contact us.