More than just salary
A benefit in kind (or non-cash benefits) is a non-monetary perk that You, as an employer, can grant Your team members. Instead of a traditional salary increase, Your team receives a benefit in the form of goods or services. These perks are surprisingly versatile – from gift cards for their favorite local shop to mobility benefits like fuel vouchers, or health and leisure perks such as gym memberships or wellness vouchers.
The key advantage: Under certain conditions, non-cash benefits can be granted completely tax- and social security-free – a real win for You and Your team.
The €50 non-cash benefit at a glance
Attractive tax-free allowance
Since January 1, 2022, You can grant Your employees up to €50 per month in tax- and social security-free non-cash benefits. This replaces the previous limit of €44 and gives You even more room for attractive perks.
One crucial condition for tax exemption: the benefit must be granted in addition to the employee’s regular salary and must meet the requirements of § 8 para. 1 sentence 3 of the German Income Tax Act (EStG). This means Your employees must not have a legal entitlement to the benefit – it must be a voluntary addition from You as the employer.
Legal framework
Clear rules apply
The tax treatment of non-cash benefits is clearly regulated in the German Income Tax Act (EStG). According to § 8 para. 1 sentence 3, a few key aspects must be observed:
- €50 limit: Non-cash benefits up to €50 per month per employee are completely tax- and social security-free. This limit cannot be carried over to following months.
- Additionality principle: The benefit must truly be granted in addition to the agreed salary. Salary conversion (i.e., replacing part of the salary with a benefit) does not fulfill this condition.
- No cash payments: Under no circumstances may the benefit be paid in cash. Even a reimbursement of expenses paid by the employee disqualifies it from being tax-free.
- ZAG compliance: Since 2022, vouchers and cards must meet the requirements of the Payment Services Supervision Act (ZAG). That means they must be limited to certain goods or services, to specific regions, or be granted for defined social purposes.
Important: If the €50 limit is exceeded – even by one cent – the entire amount becomes subject to tax and social security. There is no partial exemption. Precise accounting is essential.
Benefits for You as an employer
Tax relief
Non-cash benefits help You reduce payroll-related costs. Since these perks are tax- and contribution-free, they don’t generate additional charges.
In contrast, a regular salary increase would incur taxes and social security contributions for both You and Your team – non-cash benefits completely avoid this. The result: the real value to Your team is significantly higher than a raise of the same gross value.
Strengthen employee loyalty
Tailored perks significantly boost employee satisfaction and motivation. A monthly non-cash benefit shows genuine appreciation and strengthens emotional ties to the company.
Studies show that regular, meaningful extras beyond basic pay boost loyalty and engagement. In today’s tight labor market, that can be a decisive advantage.
Simple, flexible implementation
Non-cash benefits can be flexibly tailored to meet the individual needs of Your team. With digital platforms, You can easily provide a broad range of options for employees to choose from.
They're also easy to administer – especially if You work with specialized providers who handle the process for You.
Benefits for Your employees
Tax-free income boost
Your team members receive up to €50 monthly on top of their salary, without any taxes or contributions.
This effectively increases their take-home pay. With a potential of €600 annually, that’s a meaningful, tax-free bonus – equivalent to a much higher gross salary depending on their tax bracket.
Customizable perks
Whether it’s shopping, mobility, health, or leisure – the use of non-cash benefits can be tailored to each employee’s preferences. This freedom of choice significantly enhances the appeal.
Popular options include daily-use gift cards, fuel vouchers, or vouchers for well-known online retailers – real everyday value for Your team.
Feeling valued
Regular perks show Your team that their work is truly appreciated. Unlike one-time bonuses, monthly non-cash benefits convey ongoing appreciation.
This strengthens a sense of belonging and positively shapes Your company culture.
Conclusion: A double win
The €50 non-cash benefit is an extremely effective tool to provide Your team with attractive, tax-free perks. It boosts motivation, strengthens loyalty, and delivers real financial advantages for both You as the employer and Your employees.
Thanks to its flexible design, You can meet individual needs and raise overall team satisfaction.
In an increasingly competitive job market, non-cash benefits can be a key pillar of Your employer branding strategy. They make You more attractive as an employer and set You apart from the competition. With minimal effort, You achieve maximum impact – a true win-win for everyone involved, and a must-have in any modern, future-proof compensation strategy.
