Valuation – Benefits in kind – Inclusion – Shipping costs – 44 Euro exemption limit

Remuneration in kind,

given to employees in the form of goods or goods vouchers are exempt from wage tax and social security contributions if they do not exceed a total of 44 euros per month. The value to be used is the final price; this is the proven most favorable price, including all ancillary costs, at which the goods or services are offered to end consumers on the market.

In addition to the cost of the product

shipping costs are often incurred in the mail order and online business; until now, it was questionable whether these had to be included. According to a recent ruling by the German Federal Fiscal Court, home delivery to the employee is generally to be considered an additional benefit under the 44 euro exemption limit. If the most favorable retail price is determined in the online and mail-order business (including shipping costs), these costs are added to the value of the goods if shipping is calculated separately; this can lead to the entire non-cash benefit becoming subject to wage tax and possibly social security contributions even if the limit is exceeded slightly.

(For further comments and information, please see our Information Letter 11/2018).