{"id":7056,"date":"2026-10-13T14:37:36","date_gmt":"2026-10-13T13:37:36","guid":{"rendered":"https:\/\/grinternationaladvisors.com\/?p=7056"},"modified":"2026-10-15T15:57:55","modified_gmt":"2026-10-15T14:57:55","slug":"payment-in-kind-employees","status":"publish","type":"post","link":"https:\/\/grinternationaladvisors.com\/en\/actualidad\/payment-in-kind-employees\/","title":{"rendered":"Payment in Kind for Employees"},"content":{"rendered":"\t\t
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Short answer: <\/strong>remuneration in kind is cost-effective when it falls within the personal income tax exemptions: health insurance up to 500 euros per person per year, a meal voucher scheme up to 11 euros per working day, public transport up to 1,500 euros per year, nursery fees and job-related training. Company cars, accommodation or personal expenses paid for by the company are taxed as salary. And almost everything, whether exempt or not, is subject to social security contributions. <\/p>

What is remuneration in kind?<\/h2>

It refers to any benefit, service or entitlement that a company provides to an employee for their personal use, either free of charge or at a below-market price. A laptop used solely for work does not count; health insurance for the employee and their family does. <\/p>

For tax purposes, it is considered income from employment: it is subject to personal income tax unless the law declares it exempt. For employment purposes, the Workers\u2019 Statute stipulates that remuneration in kind may not exceed 30 per cent of the worker\u2019s total remuneration. <\/p>

What is, in fact, tax-efficient<\/h2>
Concept<\/th>Exempt from personal income tax<\/th>Key conditions<\/th><\/tr><\/thead>
Health insurance<\/td>Up to \u20ac500 per person per year (\u20ac1,500 for people with disabilities)<\/td>Covers the employee, their spouse and children. The excess is subject to tax.<\/td><\/tr>
Meal voucher or ticket<\/td>Up to \u20ac11 per working day<\/td>Valid only on days worked; cannot be accumulated or transferred.<\/td><\/tr>
Public transport<\/td>Up to \u20ac1,500 per year<\/td> For the journey between home and work.<\/td><\/tr>
Nursery (0 to 3 years)<\/td>No limit on the amount<\/td>A centre authorised, contracted or paid for by the company.<\/td><\/tr>
Training<\/td>No limit on the amount<\/td>Work-related<\/td><\/tr>
Company shares<\/td>Up to \u20ac12,000 per year<\/td>Available to all staff; shares must be held for three years, and the family\u2019s total holding must not exceed 5 per cent of the share capital.<\/td><\/tr><\/tbody><\/table>

Why it\u2019s worth it:<\/strong> an employee with a marginal tax rate of 30 per cent who receives 200 euros a month on a meal voucher, rather than an additional 200 euros in gross salary, saves around 60 euros a month in income tax \u2013 around 720 euros a year. It costs the company the same. <\/p>

What isn\u2019t very efficient (or not at all)<\/h2>

Company car for private use<\/h3>

Taxation. If the car is owned by the company, the annual benefit in kind is 20 per cent of its purchase price; if it is leased, it is 20 per cent of its market value as new, in proportion to private use. The valuation may be reduced by up to 30 per cent for efficient vehicles (electric, plug-in hybrids) that meet the requirements of the Personal Income Tax Regulations. Please note: fuel paid for by the company constitutes a separate benefit in kind. <\/p>

Housing<\/h3>

Tax is payable at 10 per cent of the assessed value (5 per cent if it has been revised), subject to a cap of 10 per cent of other income from employment. This is common in expatriate packages, and it is advisable to calculate it before signing. <\/p>

Personal expenses paid by the company<\/h3>

Gym membership, school fees for children from primary school onwards, household expenses or holiday costs: these are taxed in full, just as if they were part of your salary. There is no tax advantage, just convenience. <\/p>

Exceeding the limits<\/h3>

Any amount exceeding the tax-free allowance is subject to tax. An insurance policy worth 800 euros for an employee is subject to tax on 300 euros. <\/p>

Requirements not properly met<\/h3>

A restaurant card that allows a balance to be built up, or insurance paid for directly by the employee and then reimbursed by the company, loses its tax exemption. The design matters just as much as the concept. <\/p>

Two common pitfalls: National Insurance and advance payments<\/h2>

National Insurance.<\/strong> Just because something is exempt from income tax does not mean it is not subject to social security contributions. Since 2014, most benefits in kind (health insurance, meal vouchers, transport, nursery fees) have formed part of the contribution base. The saving is in tax, not in labour costs. <\/p>

Payment on account.<\/strong> For the portion that is not exempt, the company must make advance payments towards the employee\u2019s income tax, just as it does with tax deductions. If the company makes these advance payments itself rather than passing them on to the employee, that amount also counts as remuneration for the employee. Many payroll errors stem from this. <\/p>

For the company: what are the benefits?<\/h2>