Important Facts That Employers Need To Be Aware Of While Providing Benefits In Kind
Most employers today
understand the importance of offering the right benefits and rewards to the
employees to keep them motivated. These rewards and benefits are generally
offered in kind rather than cash, but nonetheless they play a critical role in enhancing
employee engagement and performance. However, it is important for the employers
to gain awareness about some basic facts with respect to offering such benefits
to their employees. These facts can help the employers in ensuring that the
rewards being provided by them ensure the happiness of their employees rather
than the taxation office. The most important of these facts are discussed in
brief as follows.
Exemption Threshold Of Rewards And Benefits
Offered in Kind
The employers should
make themselves aware of the maximum exemption limit on any benefits offered in
kind. Lack of this knowledge might make them responsible for putting an
additional taxation burden on their employees, which they would definitely not
approve of. Hence, the employers should be sure to consult with their payroll
service provider in Germany before deciding about any benefits and
rewards they intend to present to their employees. These professionals can
guide them through the best ways to present the rewards
which might be beyond the maximum taxation limit.
Maintain The Monthly Exemption Threshold
The employers also
need to understand that in addition keeping an eye on the maximum exemption
limits of individual benefits and rewards they also need to maintain the
monthly exemption threshold. This means that the rewards and benefits being
provided to a single employee in kind should not exceed the monthly exemption
threshold, which generally stands at EUR 44. Non compliance to this rule can
not only create taxation troubles for both the employers and employees but can
also jeopardize their social security.
Keep A Record Of Everything
Many times the
employers fail to keep a proper record of the benefits and rewards they offer
to their employees. However, this seemingly insignificant mistake can create
problems for them with the local taxation office. Moreover, it will affect
their overall account maintenance and can cause much confusion during year end
closing. As such, the employers should instruct their payroll
Germany service providers to maintain a proper record of all the
benefits offered in kind to individual employees in their salary account. In
case the employers feel the need to seek relief from compulsory record keeping,
they should do so through a competent tax office in their area.
Keep The Needs And Expectations Of Employees In
Mind
While this aspect is
not related to the legal provisions of providing benefits in kind, it still
holds much significance. The employers should make sure that they consider the
needs and expectations of their employees before deciding upon a specific
benefit or reward. This is necessary to ensure the happiness and contentment of
the employees and make them feel truly valued. This can in turn help in
improving the overall engagement and efficiency of the employers leading to
organizational growth.
Comments
Post a Comment