Extra sustenance costs (allowances / reimbursements for additional subsistence expenses) in Germany
Extra sustenance costs are tax-deductible costs incurred on a business trip for eating and drinking of the business traveler. Tax deductible are not the actual expenditures, but only the legally fixed allowances for additional meals.
For the travel expense reporting, a travel expenses statement is required which includes travel times and travel locations next to the travel receipts, not just individual records and documents. The level of the legal allowances depends on country and city. These allowances are regularly adjusted by the German Federal Ministry of Finance to reflect the cost of living of the individual countries.
Consequences of non-compliance with the legal limits:
If the employer pays his employees more than the statutory allowances, then the excess amount is converted into wages subject to tax and social security contributions.
Example: Employee travels from Berlin to London for one day (over 8 hours travel time)
Allowance for London = 26,00 EUR
Employer reimburses 50,00 EUR
Difference = 24,00 EUR (= wages)
Tax and Social Security at 24,00 EUR = 7,20 EUR (about 30%)
The employer has to pay extra 7,20 EUR as social security contribution.
The regulations in the travel expenses law are complex and every entrepreneur should be individually advised. In fact, the additional meals allowances serve to simplify the travel expenses accounting of the companies.
Co-payments for fitness and health
In principle, the employer can grant his employee a subsidy for individual health protection amounting to EUR 500,00 tax-free. However, this only applies to health-promoting measures according to art. 20 to 20b of the SGB V (Social Security Statute Book), such as nutritional counseling, non-smoking courses, addiction prevention measures for excessive alcohol consumption, etc..
Employer's co-payments for fitness or sports clubs are not tax-exempt, but are converted into wages subject to tax and social security contributions (see example above).
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MBA for Finance and Financial Services (UK), Steuerfachwirt (GER)