The so-called recreation allowance (relax benefit) is an allowance that employers can grant their employees once a year in addition to their regular salary in a tax-optimized manner. The recreation allowance is intended to subsidize a vacation trip or other forms of recreation or leisure activities.

Circula offers employers the possibility to grant the recreation allowance as an employee benefit. This allows employers to reimburse their employees with a lump sum for recreational purposes once a year. This benefit is subject to a flat 25% tax for the employer and is exempt from social security contributions. For employees, it is tax-free and exempt from social security contributions, and the flat wage tax can be passed on to the employees. Note that the amounts are exclusive of church taxes.

Employers can grant the following annual exemption limits:

The recreation allowance is regulated in § 40 (2) sentence 1 No. 3 of the Income Tax Act (EStG). According to this regulation, the employer can levy wage tax at a flat rate of 25% if he grants recreational allowances, provided the total amount of recreational allowances previously granted in the same calendar year, do not exceed EUR 156.00 for the employee. In addition to the allowance of EUR 156.00, employers are entitled to a further EUR 104.00 for the employee's spouse and a further EUR 52.00 for each child as an annual recreational allowance. Note that the amounts are exclusive of church taxes.

No, it is a voluntary benefit provided by the employer.

Example:

Mr. Zukowski, who is married and has three children, takes a two-week vacation with his family. One week after returning, he submits his claim for the recreation allowance through the Circula app. The following month, he receives a one-time reimbursement of €416 from his employer.

Every employee can be granted the recuperation allowance by the employer. This benefit is not only available to full-time employees, but also to part-time employees and working students.

The recreation allowance can be used once per calendar year. The full amount must be used at once; it cannot be split over multiple points in the year.

No, the recreation allowance can be used for both an all-inclusive holiday and a staycation at home.

No, vacation pay and the recreation allowance are different benefits and can be paid simultaneously. Both are voluntary measures provided by the employer and are not mutually exclusive.

No, the recreation allowance is tax-free and exempt from social security contributions for employees. The employer pays a flat tax of 25% on this benefit.