Payroll costs represent a significant component of a company’s gross costs. Therefore, in an effort to reduce costs and minimize current expenses, employers may make decisions that will disadvantage employees or even hinder the future development of the organization. So how to optimize payroll costs so that they are beneficial not only from an economic but also a social point of view?
Optimization of labor costs is not just about reducing the number of employees or reducing their salaries. The principle of optimizing labor costs is to ensure a balance that includes fair remuneration of employees , which is a crucial factor in maintaining a competent workforce.
Other benefits are exempt from income tax for employees and are not tax deductible for employers. In this article, we will look at employee benefits that can be attractive not only for employees, but also for employers from a tax perspective.
Compensation upon acceptance and transfer
This benefit is not well known among either employers or women database employees, but it can be very attractive for new employees from a greater distance from the workplace.
According to Section 177 of the Labor Code, an employer may provide compensation within the framework of an employment relationship upon hiring or transferring an employee to another job. The provision of such compensation is governed by Section 165 of the Labor Code.
The provision of this type of compensation is limited. The employer ceases to provide it as soon as the employee or his/her family member secures housing in the municipality of work, the maximum period for which compensation can be provided is 4 years . If the employment relationship is for a fixed term, the right to compensation ceases upon the expiry of this period.
If an employee moves to another municipality, the employer may reimburse the employee for demonstrable costs associated with the move, such as furniture transportation and other incidental expenses, including apartment renovation costs, up to CZK 15,000 . For employees, these reimbursements are exempt from income tax up to the amount specified in the Labor Code. At the same time, they are a tax-deductible expense for the employer.
Monetary and non-monetary benefits
From 2024, employees who do not want to rely solely on the state buy cell phone number list pension system can start saving through long-term investment products or pension funds up to a maximum of 24,000 CZK per year. This also applies to life insurance , which is a total of 48,000 CZK per year. This amount is a tax-deductible expense for the employer and tax-exempt income for the employee.
Other financial benefits may include interest-free loans to employees exempt from income tax up to CZK 300 thousand pursuant to Section 6, Paragraph 9, Letter r) of the Income Tax Act.
Non-monetary benefits also include costs for the professional development of employees related to the employer’s business, such as training, improving qualifications, professional practice for graduates, retraining of employees, etc. According to Section 6, paragraph 9, letter a) of the Income Tax Act, the benefit in question is exempt from income tax.
If an employer wanted to provide employees with various forms of food and drink at the workplace as a benefit , the value of such meals would be exempt from income tax for the employee. However, according to the Income Tax Act, for employers, with a few exceptions (e.g. providing drinking water at the workplace), this is a non-taxable expense.
The provision of a company vehicle for private purposes is another non-monetary benefit for employees.
Working from home office
Working from home is becoming a popular option not only for the thailand data self-employed but also for corporate employees. Home office has long been a common part of the work process in many countries, especially after the Covid pandemic.
Employees who work from a home office should receive the same salary as if they worked for the employer in the off