22 March 2023
Employment Tax
Impact: High
Summary
After the 9-Euro Ticket was successfully introduced for a limited period of 3 months in 2022, the federal and state governments have decided to introduce the 49-Euro Ticket from 2023. The ticket will be valid from May 1st 2023, and will enable passengers to travel throughout Germany on local public transport.
The detail
To date, no special wage tax regulations have been published. According to the current tax regulations, employers who wish to financially support their employees with the 49-Euro-Ticket have the following options:
1. The employer grants its employees the 49-Euro-Ticket in addition to their wages and pays either part or the full cost of the ticket. In principle, employer subsidies to employees for journeys by public transport, which are paid in addition to the wages owed anyway, are exempt from tax- and social security. This also applies to the 49-Euro Ticket.
Note: caution is advised when structuring the employer subsidy for the 49-Euro-Ticket. Employers who have previously granted a fixed monthly amount as a subsidy for the job ticket should adjust the amount of the subsidy to the 49-Euro-Ticket. Otherwise the excess amount will trigger tax and social security liability.
2. The employer can grant the 49-Euro-Ticket to employees as part of a salary conversion. The taxable non-cash benefit resulting from the reduced or free provision of the job ticket is exempt from tax and social security contributions up to an amount of EUR 50 per month. However, when applying the 50-Euro exemption limit, all benefits in kind received in one month must be considered. If the EUR 50 exemption limit is exhausted by other benefits in kind, taxation must be applied to the ticket. The employer can use the option of flat-rate taxation of either 15% or 25%.
The employer must certify the job tickets accordingly in the wage tax certificate.
Contact us
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
• Marco Libudda, Director | marco.l.libudda@vialto.com
• Anna Liepelt, Senior Manager | anna.I.liepelt@vialto.com
Further information on Vialto Partners can be found here: www.vialtopartners.com
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