To appreciate employees and create job satisfaction, many companies provide their employees with employee benefits. Benefits can come in many different types and can be characterized by the fact that they can, among other things, come as benefits that give employees cool perks at the office, or are benefits that can be used privately, but which the employer pays for. As an employer, there are several things you should be aware of regarding employee benefits. Read on as we give you examples of employee benefits and the benefits of investing in employee benefits for your employees. And of course, we'll also look at the taxation of employee benefits.
Employee benefits refer to a range of material benefits that you can choose to give your employees. Benefits can be both the implementation of various benefits in the office, or they can be benefits that your employees can use in their personal lives. Benefits can be given as compensation for a lower salary, but also as an extra reward on top of an otherwise regular salary. It's becoming more and more common for companies to use benefits to show that they value their employees - but also to provide a nice and comfortable working environment. Employee benefits help create job satisfaction, employee satisfaction and thus employee retention - and it also makes the company favorable when it comes to recruiting new employees.
Providing your employees with benefits can help contribute to happiness in the office. Many modern companies around the world have implemented regular perks in the office. This could be in the form of free coffee, free fruit, lunch or breakfast once a week. Others go a step further and invest in a beneficial fitness program or in dedicated fitness facilities. When you make your employees feel good - through benefits, for example - you create happy and engaged employees, which will be reflected in motivation, productivity and overall workplace efficiency. So offering your employees benefits is not only necessarily beneficial for your employees, but will also be beneficial for you in the long run.
Read about job satisfaction and how high job satisfaction in the office benefits you as a manager.
When the value of employee benefits exceeds a certain threshold, a so-called de minimis threshold, the employee must pay tax on their benefits. There is no taxation of fringe benefits for the employee if the value of the fringe benefits has a total value of up to DKK 6,600 in 2022 - that is, if they are directly related to work. If there is no direct connection between the benefits and the work, the de minimis limit isDKK 1 ,200 in 2022. If the value exceeds DKK 1,200, the employee must pay tax on the benefits.
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As mentioned, employee benefits can come in different sizes, shapes and types. Employee benefits can be both benefits that employees can enjoy every day and benefits that can also be used privately. The list below is not exhaustive, but can be used for inspiration if you as an employer want to give your employees a little extra and create a great working environment for your employees.
Free fruit and healthy snacks
It's great for your employees to be able to help themselves to fresh fruit or other healthy snacks throughout the day
Free tea and coffee
Maybe you have a kitchenette where people can help themselves? For most people in the workplace, it's important that the coffee is always freshly made or that you can get coffee from a good coffee machine.
Stay hydrated
Always have fresh, cold water and sparkling water available - either from a stocked fridge or from a modern water station
Plant service
Green plants and small oases around the office create a pleasant working environment
Motivate your employees with exercise
For example, by offering workplace fitness facilities, a discounted fitness program and/or a massage program for those sore backs after a full day at the screen.
Gift your employees
Provide welcome gifts (e.g. flowers or chocolates), anniversary gifts and/or birthday gifts on birthdays for your employees.
Meet your team for breakfast
Have breakfast once a week with your employees, or have them sit down for breakfast together on Friday mornings, for example. It helps to get the day off to a good start and contributes to a nice and cozy social environment.
Healthy and green lunch scheme
Provide a healthy, green and delicious lunch scheme for your employees so that they get proper food every day for lunch and are refueled for the afternoon hours.
Paid staff parties or corporate events
Staff parties and corporate events are both festive and help bring your employees together socially. For example, plan a fun day of team building or organize a staff party to bring your employees together.
Paid anniversary parties for employees or the company
Do you have an employee who has been with you for 10 years? Maybe even 25 years? Then it's almost time to celebrate and celebrate! It could also be that your company is celebrating an anniversary, in which case an anniversary party can be a great way to celebrate the company's achievements, the company as a workplace and the employees who have helped you get to where you are now.
Paid Christmas lunch or summer party
A Christmas lunch or summer party is always nice, and it gives your employees a nice break from everyday life in the office - and an opportunity to talk to each other across departments.
Christmas gifts
It's always good karma to wish your employees a Merry Christmas with a gift and a thank you for the past year. Be aware of the rules for employee benefits and tax (read more in the next section).
Company car or "free car"
Do you have employees who have to drive long distances to and from work? Maybe you have employees who are salespeople or have another job where they have to travel a lot around the country? A company car that your employee is allowed to use for private purposes is called a "free car" and your employee must pay tax on it. This means that every month, together with the employee's salary, you must report the value of the free car. Read more at SKAT.dk
Free company phone
A free company phone means that your employees can use their company phone privately. This is subject to special rules on employee benefits and tax, where the employee must pay tax on DKK 3000 per year. Read more at SKAT.dk
Insurance
As an employer, you can offer to pay for your employees' general health insurance or sickness and accident insurance.
Health insurance:
For example, if a health insurance policy coversboth work-related injuries and private injuries, your employees must pay tax on the entire premium (unless the health insurance is split into separate policies).
In the vast majority of cases, employer-paid health insurance is not covered by the de minimis limit for work-related benefits of DKK 6,600 and is never covered by the de minimis limit of DKK 1,200 for private benefits.
If the health insurance only covers work-related illnesses and injuries, it is tax-free for employees
Health and accident insurance:
If you as an employer pay for your employees' health and accident insurance and if itonly covers working hours, the insurance premium isnot taxable for the employees (this also applies to travel accident insurance).
If you as an employer pay for your employees' health and accident insurance and if it also covers injuries during the employee's free time, the insurance premium is taxable for the employees, unless the sum insured is less than DKK 500,000 and the insurance does not cover your employees' family members. If the insurance also covers your employees' family members and/or the sum insured is more than DKK 500,000, the employees are taxed on the insurance premium.
Read more atSKAT.dk
When it comes to Christmas gifts for your employees, some special tax rules apply. If you as a manager give your employees an annual Christmas gift that does not exceed a value of DKK 900, your employees do not have to pay tax on the Christmas gift. When you calculate the value of employee benefits for each employee during the year, a Christmas gift with a value ofDKK 900 or less is included.
Read more atSKAT.dk