The so-called recreation lump sum or relax allowance is an allowance that employers can grant their employees in a tax-optimized manner. Thus, employers can reimburse their employees once a year with a lump sum for the purpose of recreation. This employee benefit is taxed at a flat rate of 25% for the employer and is not subject to social security contributions. For employees, it is exempt from both tax and social security contributions.
On what legal basis is the recreation allowance based?
Paragraph 40 of the Income Tax Act (EStG) on lump-sum wage tax in special cases regulates recreation allowances. Paragraph 2, sentence 1, number 3 of the EStG states that the employer may levy wage tax at a flat rate of 25% insofar as he grants recreational allowances of these, together with the relax allowances granted earlier in the same calendar year, do not exceed 156.00 euros for the employee.
In addition to the allowance of 156 euros, employers have a further 104 euros available annually as a recreational allowance for the employee's spouse and a further 52 euros for each child.
Frequently asked questions
How much is the Relax Benefit allowance?
156€ for each employee
104€ extra for spouses
52€ extra for each child
Example: Mr Zukowski is married and has three children. He goes on holiday with his family for a fortnight. After his return, he can easily claim his Relax allowance via the Circula app. In the following month, Mr Zukowski receives a one-off reimbursement of €416 from his employer.
Who can use the Relax Benefit?
All employees can be granted the Relax Benefit by the employer. Moreover, this benefit cannot only be used by full-time employees, part-time employees, and working students can also use it.
Are holiday allowance and the Relax Benefit the same thing?
No, holiday pay and the Relax Benefit are not the same and may be paid in parallel. They are not mutually exclusive and are both voluntary measures by the employer.
How often can the recreation lump sum be used?
The amount can be paid out once per calendar year. The entitlement comprises the entire amount once. There can be no splitting of the amount over the year.