The benefits provided from the social fund represent a taxable income for employees (except for, for example, meal allowance, social aid, preventive medical examinations described below). The tax-deductible expenses of the employer arise at the moment of realizing contribution to the social fund, the use of social fund as such does not affect employers’ expenses, however, the finances accumulated in social fund can only be used for purposes in accordance with the Act on social fund.
Social aid
Social aid provided by the employer from the social fund due to the death of a close person living in the employee's household, elimination or mitigation of natural disasters or employee’s temporary disability the uninterrupted duration of which exceeds more than half of the tax period is tax exempt for the employee in the total amount up to € 2,000 for the tax period and applicable only for aid from one employer.
Preventive medical examinations
In the case of a contribution for preventive medical examinations paid by the employer above to the legal obligations on the protection of the health of employees, if being provided from the resources of the social fund, it represents an income exempt from tax on the employee´s side. The use of the social fund does not impact the company’s tax base whereas the tax expense is incurred at the time of the contribution to the social fund.
Employers use fringe benefits to motivate employees to perform better as well as to differ themselves from the competitors. What does the provision of various fringe benefits mean for the employer and employee in terms of taxes? What changes are coming into force in 2022 in fringe benefits?
As one of fringe benefits, the employers often contribute to employees on meals in the higher amount than minimum limit set by the Labour Code, or meal vouchers are fully reimbursed by the employer.
The usage of a company’s car for private purposes is considered as employee's taxable in-kind benefit.
When using electronic devices for private purposes, the employer may assert some of the related expenses.
How and when to apply tax expenses when training employees?
How and when to apply tax expenses when accommodating employees?
Similarly, as for accommodation, a transport to/from the place of work can be tax exempt fringe benefit for the employee.
What are the taxation conditions for employers who provide recreation vouchers?
Employers may provide various other types of fringe benefits.
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