What Is an Employee Benefit Card?
The employee benefit card is a modern form of employee benefit: a prepaid or debit card (e.g. Mastercard or VISA) that you can load with up to €50 per month per employee. As long as the exemption limit under Section 8 (1) sentence 3 of the German Income Tax Act (EStG) is not exceeded, this amount remains tax- and social security-free for your employees.
The card can be used flexibly for a wide variety of purposes – from shopping, dining, and mobility to fitness, health, education, leisure activities, or regional offers.
Benefits for Your Company
Tax Relief and Lower Payroll Costs
Using the benefit card allows you to provide your employees with up to €50 per month in tax-free, non-cash compensation on top of their salary – without incurring income tax or social security contributions. This lowers payroll costs and is a cost-efficient alternative to a traditional salary increase.
Simple Digital Management with Low Bureaucracy
Benefit cards are managed digitally via user-friendly portals. You can automate top-ups, manage card orders, and maintain a clear overview of expenditures – saving time and minimizing administrative effort.
Customizable and On-Brand
The cards can be designed in your corporate branding, strengthening your employer brand and reinforcing employee identification with your company.
Boosts Employer Branding and Employee Retention
Offering regular, tax-free benefits demonstrates appreciation and recognition, which increases motivation and promotes long-term loyalty to your company.
Scalable and Quickly Implementable
Whether for a small team or a large organization, the benefit card is easy to roll out and scale as needed. This gives you flexibility to adapt to your organization’s needs at any time.
Benefits for Your Employees
Up to €50 Tax-Free Every Month
Employees receive up to €50 per month tax- and social security-free on top of their salary. This means more net income with no additional tax burden – a clear financial benefit.
Great Flexibility and Wide Range of Uses
Whether for shopping, fuel, dining, sports, culture, or leisure activities, the benefit card can be used at numerous acceptance points, giving employees full flexibility based on their individual preferences.
Increased Motivation and Recognition
Regular benefits show employees that their efforts are valued. This enhances motivation and contributes to a positive working environment.
Security and Ease of Use
Cards are available in physical or virtual form and comply with modern security standards. Their intuitive use increases acceptance and satisfaction among employees.
Legal Framework
According to Section 8 (1) sentence 3 EStG, non-cash benefits up to €50 per month may be granted tax- and social security-free. The exemption limit can not be exceeded – otherwise, the full amount becomes taxable. The benefit must be granted in addition to the employee’s regular salary (salary conversion is not permitted). The card must comply with the Payment Services Supervision Act (ZAG), particularly regarding restrictions to specific merchants or regions.
Conclusion
The employee benefit card is a modern and effective compensation tool offering substantial advantages for both employers and employees. It allows for tax-free additional benefits, enhances employee retention, and strengthens employer branding. Thanks to its easy administration and flexible usage, the benefit card is an attractive alternative to traditional salary increases or one-off bonuses.
In an era of skilled labor shortages and growing expectations around employer attractiveness, the employee benefit card is a powerful tool for winning talent and sustainably increasing employee satisfaction and motivation.
