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company outing employer subsidy
Employer's contribution to company outings: How you can benefit tax-wise!
Would you like to show appreciation to your employees while optimising your budget? The company outing with employer subsidy offers an attractive option. The Federal Ministry of Finance provides clear guidelines here. In this article, you will find all the important information about the tax advantages and design possibilities. For individual advice on the perfect organisation of your company outing, get in touch with us here.
The topic, briefly and concisely
Take advantage of the tax-free allowance of 110 euros per employee for company outings to enhance employee motivation and team spirit.
Plan the company excursion carefully and consider the tax aspects to make the most of the subsidy and avoid tax pitfalls. Productivity can be increased by up to 10%.
Ensure transparent documentation of all costs and invite all employees (or those of a department) to maintain the principle of equal treatment and make optimal use of the subsidy.
Discover how you, as an employer, can delight your employees with a tax-free company outing while saving on taxes. Find out more now!
The Impact of a Successful Company Outing
A company outing is more than just a pleasant day out of the office. It is an investment in your team that fosters motivation and camaraderie. Through shared experiences outside of the usual work environment, employees can get to know each other better, improving communication and teamwork. This, in turn, positively influences productivity and the workplace atmosphere. A well-organised outing can strengthen company culture and enhance employee retention. At GoTuro, we understand the importance of such experiences and tailor outings specifically to your needs.
The Employer's Subsidy: A Win-Win Situation
The employer can provide a subsidy for the company outing that is tax-free under certain conditions. This is an attractive way to benefit your employees while also saving on taxes. The tax-free subsidy is subject to certain rules, which we will explain in more detail below. Knowing these rules is crucial to optimally utilise the subsidy and avoid tax pitfalls. We are happy to support you in making the most of the employer's company outing subsidy and correctly considering all tax aspects. More information on the conditions can be found here.
110-Euro limit: How to make optimal use of the allowance
The Magic Threshold: 110 Euro per Employee
Legislation has set a tax-free threshold of 110 euros (gross) per employee for the company outing. This means you, as an employer, can spend up to this amount per employee on the outing without incurring income tax or social security contributions. This limit applies to a maximum of two events per year, including anniversary celebrations. It's important to note that this is a tax-free threshold, not an allowance. This means that the entire amount is taxable if the costs per employee exceed 110 euros. Adhering to the 110-euro threshold is crucial for optimising the employee outing allowance from the employer for tax purposes. More details on the tax treatment can be found here.
What Happens if the Threshold is Exceeded?
If the costs per employee exceed the 110-euro threshold, there are two options: either the excess amount is treated as taxable income, or the employer assumes income tax at a flat rate of 25 per cent. Flat-rate taxation is often the simpler and more cost-effective solution, especially if the excess amount is small. However, it is important to carefully weigh the pros and cons of both options and, if necessary, consult a tax advisor. Correct handling of the tax is essential to avoid additional payments or penalties. We at GoTuro are happy to advise you on the optimal tax planning for your company outing. Additional information on correct calculation can be found here.
Deductible Costs: How to Maximise the Grant
Which costs are deductible?
The deductible costs for a company outing include, among other things, transportation costs, catering, admission fees, organization costs, and entertainment (e.g. artists, entertainers). Gifts to employees can also be claimed as business expenses under certain conditions. However, travel expenses incurred by employees traveling from a branch to the location of the company outing are not deductible. It is important to carefully document all costs and keep receipts available to provide evidence in the event of a tax office audit. Accurately recording the deductible costs is crucial to making the most of the company outing subsidy from the employer. You can find a detailed list of deductible costs here.
Strategic Planning: Integrating Further Education
A smart strategy to maximize the company outing subsidy from the employer is to integrate training measures. If you combine the outing with a seminar or training session, you may also be able to claim costs for these measures. However, it is essential that the training component has a clear link to the employees' professional activities and does not merely serve as a pretext. Prior consultation with your tax advisor is advisable to ensure that the costs are indeed deductible. By combining a company outing with further education, you can offer your employees double the benefits: team building and career development. You can find more information on incorporating seminars here.
At GoTuro, we are happy to assist you in planning and organizing your company outing, to help you optimize all tax benefits. Our experts will provide comprehensive advice on all matters related to the company outing subsidy from the employer and support you in selecting suitable activities and locations.
Invitation policy: Invite everyone, optimise subsidies!
Who should be invited?
As a general rule, all employees must be invited to a company outing. However, if you are organising an outing just for a specific department, then only the employees of that department need to be invited. It's important to observe the principle of equal treatment and not exclude any employees without a valid reason. The allowance can only be claimed for employees who actually participate in the outing, not for those who are merely invited. Having the correct invitation policy is essential to optimally utilise the company outing allowance from the employer and to prevent discrimination. You can find more information on the correct procedure here.
Family members: Distributing the allowance correctly
If you invite employees' family members to the company outing, you must distribute the allowance among all participants. This means the 110-euro limit applies per person, regardless of whether it's an employee or a family member. If the cost per person exceeds 110 euros, the amount exceeding will be treated as taxable wages. It's important to calculate the costs carefully and consider the tax implications when inviting family members. We at GoTuro are happy to advise you on optimally planning your company outing, taking into account the participation of family members. Information on distributing the allowance for family members can be found here.
Sharing costs: How to reduce your expenses
Cost Sharing: Opportunities and Limitations
One way to reduce the costs for the company outing is to share the costs between the employer and employees. For example, you can agree that the employer covers costs up to the 110-euro limit and employees bear any costs beyond that themselves. However, such an agreement should be recorded in writing to avoid misunderstandings. It is important to note that the employees' contribution must not result in the company outing being treated as taxable income. Correctly structuring the costs is crucial to optimally utilise the company outing subsidy from the employer and avoid tax disadvantages. Additional information on cost sharing can be found here.
Transparent Documentation is Essential
Whether you fully cover the costs or agree on cost sharing, transparent documentation is essential. You should carefully record all costs and employee contributions and keep receipts. In the event of an audit by the tax office, you must be able to prove that the costs are reasonable and that tax regulations have been adhered to. Careful documentation is not only important for the tax return but also for internal accounting. We at GoTuro are happy to support you in creating transparent and complete documentation for your company outing. Information on the necessary documentation can be found here.
Legal Aspects: No Entitlement, but Insurance Coverage!
No Legal Entitlement to a Company Outing
It is important to know that employees have no legal entitlement to a company outing. Even if an outing takes place regularly, it does not establish any customary right. Organising a company outing is a voluntary service by the employer. However, company agreements between the employer and the works council may contain provisions regarding the company outing. In such cases, the provisions of the company agreement are binding. Understanding the legal framework is important to avoid misunderstandings and conflicts. Additional information on the legal framework can be found here.
Accident Insurance: Protection During the Outing
During a company outing, employees are protected by statutory accident insurance. This means that in the event of an accident during the outing, the accident insurance covers the costs for treatment and rehabilitation. The direct way to and from the company outing is also covered by the accident insurance. However, there are exclusions from insurance coverage, such as in cases of alcohol abuse or gross negligence. It is important to inform employees about the insurance coverage and exclusions to ensure appropriate actions are taken in the event of an accident. Knowledge of the insurance coverage provides employees with security and confidence. Information on insurance coverage can be found here.
Inspiration statt Routine: How to Inspire Your Team
Designing Attractive Company Outings
A company outing should be more than just an obligatory event. It should be enjoyable for the employees, motivate them, and strengthen team spirit. Avoid uninspired and dull excursions that offer no added value. Instead, opt for creative ideas and varied activities. Ask your employees about their wishes and ideas and involve them in the planning. Offer various options so that everyone can find something suitable. A successful company outing is an investment in employee satisfaction and corporate culture. We at GoTuro have numerous ideas for modern and appealing excursions that will excite your employees. Get inspired by our incentive trips!
Clear Distinction Between Employees and Guests
When planning the company outing, it is important to distinguish between employees and guests. Guests include, for example, business partners, temporary workers, or employees from associated companies. The costs for guests are treated differently for tax purposes than the costs for employees. It's important to record the costs for employees and guests separately and apply the tax regulations correctly. A clear distinction is crucial to avoid tax mistakes. You can find information on the correct tax treatment of guests here.
Ensure compliance: Documentation avoids back payments
Handling Compliance Issues
Adhering to tax regulations is of utmost importance when organising a company outing. You should ensure that all costs are accurately recorded and documented, and that the €110 limit is observed. If in doubt, consult a tax advisor to avoid mistakes and additional payments. Diligent compliance is crucial not only for tax returns but also for internal accounting and your company's reputation. We at GoTuro are happy to support you in meeting all compliance requirements related to your company outing. You can find information on compliance issues here.
Communication with the Tax Office
If you are unsure how to treat certain expenses for tax purposes, do not hesitate to contact the tax office. You can apply for a binding ruling to gain legal certainty. Communication with the tax office can help you avoid mistakes and additional payments. It is better to clarify matters in advance than to face unpleasant surprises later. Open and transparent communication with the tax office demonstrates responsibility and professionalism. You can find information on communication with the tax office here.
Make the most of your grant: Sustainably boost motivation!
More useful links
The Bundesministerium für Finanzen (BMF) provides the latest tax regulations in Germany.
The DIHK - Deutscher Industrie- und Handelskammertag e.V. offers information on in-house company events.
Statistisches Bundesamt (Destatis) provides general economic data.
FAQ
What advantage do I have as an employer from a company outing with a subsidy?
As an employer, you benefit from more motivated employees who are more engaged with your company. This leads to higher productivity and an improved working atmosphere. The tax-free subsidy is also an attractive way to reward your employees while saving on taxes.
What is the amount of tax-free subsidy I can grant my employees for a company outing?
The law has set a threshold of 110 euros (gross) per employee for the company outing. This amount is tax and social security-free, provided it is not exceeded.
What happens if the costs for the company outing exceed the 110-euro limit?
If the costs per employee exceed the 110-euro limit, the employer can cover the income tax at a rate of 25 percent. Alternatively, the excess amount can be treated as taxable wages.
What costs can be claimed for tax purposes in the context of a company outing?
Deductible costs include, among others, transportation costs, catering, entrance fees, costs for organisation and entertainment. Gifts to employees may also be claimed as business expenses under certain conditions.
Do all employees have to be invited to a company outing?
In principle, all employees must be invited to a company outing. If the outing is organised for a specific department, only the employees of that department need to be invited.
Are my employees insured against accidents during the company outing?
Yes, during a company outing, employees are protected by the statutory accident insurance. This also applies to the direct journey to and from the company outing.
What should be considered when inviting family members to the company outing?
If you invite family members of employees to the company outing, you need to divide the subsidy among all participants. The 110-euro limit applies per person.
Is there a legal right for my employees to have a company outing?
No, employees have no legal entitlement to a company outing. Organising a company outing is a voluntary benefit by the employer.
