Fringe Benefits: definition, taxation, and how to distribute Benefits with Gift Cards in Italy
How Flexible benefits work: legal aspects, tax deductions, and the advantages for those who choose to pay them with Gift Cards.
Fringe Benefits 2019: what are they and what Article 51 of the Italian tax code says
Fringe benefits, or flexible benefits, are the set of goods, services or benefits employers make available to employees as a form of non-monetized compensation included on one’s pay slip. The objective is to boost productivity and improve workers’ quality of life, thus increasing their purchasing power.
This form of remuneration is part of the employee benefits plan and is governed by Article 51, Paragraphs 3 and 4 of the Italian Tax Code and includes a number of advantages, including:
- company cars
- cellular telephones
- laptop computers or tablets
- meal vouchers
- gift cards
- life insurance policies
- educational and instructional services
- staff canteen
- children’s play areas
- winter and summer sports centres
- transfer of company products at favourable or free terms
- below market rate loans to employees
- supplementary social contributions such as pension funds
For more information:
- Flexible Employee Benefits: how they work and what to know about benefits vouchers
Fringe Benefits for employees: taxation of Flexible benefits
Paragraph 3 of Article 51 of the Italian Tax Code dictates the normal values of Fringe Benefits and specifies that workers can make use of goods or services provided by the company with a spending limit of €258.23. Any amount exceeding this limit forms part of the employee’s income and is thus subject to taxation.
Paragraph 4 of Article 51 of the Italian Tax Code, on the other hand, regulates the rules needed to determine conventional values of certain goods and services, such as vehicles and buildings employers provide for employee use.
Detailed legislation relating to Fringe Benefits taxation provides for:
- tax exemption for meal vouchers up to €5.29 per day
- for vehicles provided for various uses, the taxation is equal to 30% of the kilometric cost, determined in accordance with the ACI tables, using an established distance of 15,000 kilometres
- for loans given to employees taxation is applied to the difference between the interest rate provided by the company and the market rate
- for properties given, lent, or leased to employees, taxation is equal to the difference between the land registry income of the building, plus all expenses related to the building itself, including utilities not charged to the employee
- for cell phones and tablets, taxation is applied to private phone calls charged by the telephone service provider chosen by the employer or business”
INPS and INAIL social security and welfare contributions are exempt from taxation, meaning those paid by both the employer and the employee, health services contributions paid up to a maximum amount of €3,615.20 yearly, and shared employee transport services from home to the workplace.
Fringe Benefits: business deductions for 2019 Flexible Benefits
Fringe Benefits deductions for businesses include:
100% deductibility for the company’s canteen, nursery schools, scholarships, training courses, group transport, fringe benefits with a maximum amount of €258.23, and buildings given to employees who have changed their residence for work
- 80% deductions for work-use telephones and 80% for various uses phones, with reference to portions not attributable to the employee
while for buildings given, lent, or leased to employees, the deductible within the limits of the employee’s income, according to the provisions of art. 51.4c
The advantage of using Gift Cards to distribute company Benefits: why choose Epipoli’s MyWelfare Card
MyWelfare Card is the ideal solution for companies wishing to receive tax advantages to offset the employee benefits provision: recipients of this card can freely change them into one or more Gift Cards from the Epipoli catalogue.
With hundreds of Gift Cards to choose from in various product categories, employees can choose and receive what truly desire as their employee benefits.
To find out more:
- Everything to know about the MyWelfare Card: discover the Employee Benefits platform
- Contact us: firstname.lastname@example.org