“Non-cash remuneration values 2020 (catering, meals, canteen, free accommodation)”.
For income tax and social security
If employees receive non-cash benefits from their employer (e.g. free accommodation or canteen meals), these are subject to wage tax as non-cash benefits and are also regularly subject to social security contributions. The amount of remuneration in kind is determined in the Social Security Remuneration Ordinance.
The value for free meals is composed of breakfast, lunch and dinner.
The official non-monetary remuneration value for a lunch or dinner in 2020 is 3.40 euros in each case. Any additional payments by the employee reduce the non-cash remuneration value; if the employee pays the full non-cash remuneration value, no amount remains that is subject to tax and social security contributions.
The recognition of the (favorable) non-monetary remuneration value is regularly considered for
- Meals provided by the employer to employees on a workday basis in a self-operated canteen, restaurant or comparable facility;
- Benefits provided by the employer to meal-providing establishments (e.g., restaurants) that help reduce the cost of meals served during the workday, if the employer’s subsidy does not exceed the actual price of the meal;
- the distribution of meal vouchers or restaurant vouchers/vouchers to employees for redemption in restaurants, etc. The prerequisite for recognition at the non-cash remuneration value is that the restaurant voucher does not exceed a value of 6.50 euros per meal.
- Cash allowances paid by the employer – e.g. instead of meal vouchers or vouchers – to its employees without a contractual relationship with an acceptance point for the purchase of a workday meal; here, too, the allowance may not exceed 6.50 euros per meal.
In order to claim the non-cash benefit, it must be ensured (by the employer) that only one meal per working day is purchased and subsidized. Purchasing meals for other days “in advance” is harmful and leads to the recognition of corresponding allowances as cash wages at nominal value.
If the provision of meals free of charge or at a reduced price results in an amount subject to wage tax, the employer may deduct this amount in accordance with Section 4 of the German Income Tax Act (Einkommensteuergesetz). § 40 para. 2 EStG at a flat rate of 25%; in this case, the employee is exempt from social security contributions.
With regard to the granting of free accommodation by the employer, a distinction must be made:
- If it is a self-contained apartment (or a single-family house) in which an independent household can be run, the rental price customary in the locality is regularly to be taken as a basis. Incidental costs, such as electricity and water, are to be included at the actual price.
- In contrast, a flat-rate non-cash remuneration value is regularly to be applied for the provision of other accommodation (individual rooms); for 2020, this amounts to 235 euros per month. The accommodation may be valued at the local rental price if this is lower than the flat-rate non-cash remuneration value.
In the case of a reduced-price transfer of an apartment or accommodation, the above-mentioned values are reduced by the usage fee paid by the employee; the remaining amount is then subject to wage tax and social insurance.