Employers who invest in the health of their staff can, under certain conditions, save on tax and social security contributions. The law allows an annual allowance of 600 euros per employee for certain preventive measures. However, not every health service is covered, and drawing the line between them can be quite tricky in practice.
Basic requirement: additionality
For a benefit to remain tax- and contribution-free, it must, in accordance with Section 3(34) of the Income Tax Act, be granted in addition to the regular salary. Deferred compensation – that is, the reallocation of an already agreed salary to health benefits – is not permitted. The allowance applies per calendar year and per employee. In the event of a change of employer or multiple employments, it may be claimed separately from each employer. If the amount is exceeded, only the excess is subject to tax and social security contributions.
Which benefits are eligible?
The tax-free allowance covers two main categories:
- Certified prevention courses: Courses that have been certified by the Central Prevention Certification Body or a statutory health insurance fund. The certification mark is awarded for the areas of physical activity, nutrition, stress management and substance use.
- Workplace health promotion without certification: Behavioural measures that form part of a structured workplace health promotion process, such as stress management programmes, breaks designed to encourage physical activity, or nutrition-related courses.
Important: Traditional gym membership or massage treatments are not eligible for tax relief. Even if an employer pays a contribution towards a certified course that an employee attends themselves, this may be included within the tax-free allowance, provided that the certificate and proof of attendance are properly documented.
BFH ruling: Accommodation and meals are not tax-exempt
The Federal Fiscal Court has clarified an important restriction. In its judgement of 23 November 2023 (case number VI R 24/21), the court ruled that accommodation and meal costs incurred in connection with a preventative health course do not qualify for tax exemption. In the case in question, an employer had offered its employees multi-day health retreats with hotel accommodation, comprising Nordic walking, back training and nutrition courses. The tax office did not recognise the hotel costs as tax-exempt, and the Federal Fiscal Court upheld this view. Accommodation and meals do not directly improve health and are therefore not classified as eligible preventative benefits. It is particularly important to note that, in the Federal Fiscal Court’s view, if organisers invoice the total costs for the course, hotel and meals as a single lump sum, even an estimated breakdown is not permitted.
Documentation is crucial
Employers would be well advised to ensure that all relevant documents are carefully filed with the payroll records. These include the course certificate, the employee’s certificate of attendance, any application for funding where applicable, and, in the case of in-house courses, a written statement from the course leader outlining the course structure and qualifications.
Anyone wishing to implement workplace health promotion in a tax-optimised manner should have the exact details reviewed in advance. The distinction between tax-privileged and non-tax-privileged benefits is very fine, and errors in implementation can lead to unintended additional payments of payroll tax.
Source: Haufe: Human Resources
This article was created with the help of AI and has been editorially reviewed.
