In order to be able to use the Germany ticket, which will apply from May 2023 as a tax-reduced benefit for the workforce, employers have to fulfill a number of formal conditions. In general, subsidies for journeys on public transport in scheduled services between the home and the first place of work are exempt from income tax and social security. So there are no taxes and social security contributions for the employer.
payroll accounting
Correct conversion important for wage tax exemption In order for the wage tax exemption to be properly claimed when the Germany ticket is granted, proof of the purchase, for example a copy of the ticket, and the amount must be available. In this way, the tax office can understand the legality of the benefit. In addition, the regulation applies that the subsidy is only exempt from wage tax up to the actual amount of the travel costs, which must also be listed in the payslip according to the Remuneration Statement Ordinance. If the change to the Deutschlandticket is not properly identified, the tax office can interpret it as a tax advantage that has been overused. For example, if the previous cost of a monthly ticket was 80 euros, the tax advantage used was greater compared to the Germany ticket. If this is not changed in the payroll, the tax advantage will be too high in the future. A review by the tax office can lead to corresponding consequences.
Further framework conditions of the wage tax exemption for travel allowances
In order to be able to use the possibility of the income tax-free subsidy of public transport travel costs between the home and the first place of work, further legal framework conditions must be met: The subsidy is to be granted in the context of an ongoing employment relationship and the costs are to be subsidized in whole or in part. In addition, the benefit must be paid in addition to the wages owed. Taxi rides or air travel are excluded from the subsidy.
Source: ABG General Advisory and Treuhandgesellschaft mbH
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Anna-Katharina Reiß is an editor at Mittelstand-Nachrichten. She is based in our central editorial office in Bergneustadt and can be reached by our readers on Tel. 02261-9989-885 or email: [email protected].