Many of your employees travel to work by public transport.
This not only protects the climate, but also saves taxes and social security contributions.
As an employer, you can support your employees financially in various ways with their travel costs. This way, your employees not only get to work in a more relaxed and cost-effective manner, but your company also saves costs and CO2 emissions. One option is the state-subsidized public transport subsidy.
Since the beginning of 2020, your employees can receive a state-subsidized public transport allowance, which can even be cost-neutral for you as an employer. This is a tax- and duty-free reimbursement of tickets for local public transport.
In contrast to the job ticket, the public transport subsidy works independently of the number of employees in the company and is therefore suitable for any size of company.
As an employer, you generally do not incur any additional costs, as employees buy tickets themselves and only incur expenses for the company when they actually use them. In this case, there is no upfront financing by your company.
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Public transport allowances can be granted in addition to salary or as deferred compensation.
Both options can also be combined. If you as an employer only use the state subsidy through salary conversion, the public transport subsidy is cost-neutral for your company. In the following, we explain both options using two examples:
Your company wants to actively protect the climate and reduce its CO2 emissions. To this end, it provides all employees with a budget of 50 euros per month for the use of public transport.
With 10 employees, this is a total cost of 500 euros per month. If the company were to pay each of the 10 employees 50 euros more instead of the public transport subsidy, the company would incur costs of around 600 euros. Employees would also only have an advantage of around 250 euros.
This is due to the fact that the employer has to pay a further 20% in non-wage labor costs (social security contributions) in the event of a salary increase. Employees also have to pay approx. 20 % social security contributions and approx. 30 % income tax on their cash wages.
Thus, the tax-free public transport allowance has a clear financial advantage for both the company and the employee compared to a salary subsidy.
Your company currently has no budget available, but would like to offer its employees a public transport subsidy. In this case, salary conversion is worthwhile.
If your employees submit tickets in the amount of 100 euros in one month, no more income tax and social security contributions will be deducted from this amount.
This means that your employees receive 100 euros. If no public transport subsidies were used, this means that approx. 20% social security contributions and approx. 30% wage tax would be deducted from 100 euros.
This means that your employees will only receive 50 euros.
However, the tax exemption does not apply to salary conversions. The tax office levies a flat-rate tax of 15% or 25% on salary conversions such as the public transport allowance. However, since you as an employer save 20% on non-wage labor costs, you can easily cover these lump-sum taxes.
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Travel allowances offer employees maximum flexibility. By allowing employees to decide which ticket they would like to use or which best suits their situation, travel allowances appeal to all employees in your company. So everyone can benefit.
Until the introduction of the public transport subsidy, environmentally friendly journeys by employees by bus and train could only be subsidized via a job ticket within the non-monetary remuneration exemption limit of 44 euros (until 2021, since 2022 the non-monetary remuneration exemption limit has been 50 euros).
In addition, employers must conclude contracts with transport companies for a job ticket and order and pre-finance the tickets from them.
For companies, there are usually minimum purchase quantities and, as a rule, a ticket must be purchased for each individual, regardless of actual use.
Employees who commute through several transport associations have a hard time, because there is no real solution for them.
With the establishment of New Work and frequent home offices, monthly tickets such as the Job Ticket often no longer pay off.
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