Seize the Opportunity: Tax-Free Rewards & Compensations for Your Employees – Current Benefits for 2025! It’s time for Christmas bonuses and other tax-exempt payments!
Dear Entrepreneurs, Directors, and Human Resources Managers,
The end of the year is the ideal time for you, as employers, to express your gratitude to your employees for their effort, work, and contribution to the company’s success.
Did you know that legal possibilities exist for you to financially reward your employees without additional tax burdens?
You can pay your employees a Christmas bonus (Božićnica), a gift for children, small presents, and other compensations COMPLETELY TAX-FREE – without income tax and without associated contributions!
We highlight some of the most interesting:
| DESCRIPTION OF NON-TAXABLE PAYMENT | MAXIMUM TAX-FREE AMOUNT |
| Occasional Rewards (CHRISTMAS BONUS, annual leave allowance (regres), etc.) | up to €700 per year (cumulative for all occasional rewards) |
| Gift in Kind (goods) – e.g., Gift voucher in a store for groceries and household necessities | up to €133 per year including VAT |
| Gift to Employee’s Child up to 15 years of age (who reaches 15 years of age by December 31st of the current year) | up to €140 per year (per child) |
| Monetary Rewards for Work Results and other forms of additional employee rewarding (additional salary, supplement to monthly salary, etc.) | up to €1,200 per year |
| Lump-sum Monetary Allowance for Covering Employee Meal Costs | up to €100 per month, or €1,200 per year (cannot be paid in advance) |
| Employee Accommodation Costs incurred during employment with the employer based on credible documentation (invoices, calculations, records, etc.). Non-taxable income is recognized for the month in which the accommodation service was provided. | up to the amount of actual expenditure paid by non-cash means |
| Reimbursement for Regular Childcare (Kindergarten) Costs for employees’ children paid to the employee’s account based on credible documentation (contract, invoice, payment slip, etc.) from pre-school institutions and other legal or natural persons providing childcare based on special regulations. | up to the amount of the employer’s actual costs |
| Systematic Medical Check-ups | up to the amount of actual costs, provided it is offered to all employees |
| Lump-sum Monetary Allowance for Covering Employee Costs for Work at an Isolated Place of Work (Work from Home) according to the Labour Law | up to €4 per day of work from home, and a maximum of €70 per month |
| Severance Pay upon Retirement | up to €1,500 |
| Newborn Support/Allowance | up to €1,500 |
| Support/Allowance due to Employee’s Disability | up to €600 per year |
| Support/Allowance in Case of Employee’s Death | up to €1,200 per year |
| One-Time Support/Allowance in Case of Death of an Employee’s Immediate Family Member (spouse, parent, spouse’s parent, children, other ancestors/descendants in the direct line, adopted/foster children and children in care, and an adult person for whom the taxpayer has been appointed a guardian) | up to €600 per year |
| Support/Allowance due to Employee’s Uninterrupted Sick Leave Longer than 90 Days. The sick leave period longer than 90 days does not have to fall within a single calendar year. | up to €600 per year |
| Voluntary Pension Insurance Premiums | up to €67 per month or €804 per year |
| Supplementary and Additional Health Insurance Premiums based on credible documentation | up to €500 per year paid by non-cash means |
Why Is This an Excellent Opportunity for Employers?
- Employees receive a higher net payment (100% of the amount goes into their pocket).
- You, as the employer, save 30–40% on taxes and contributions compared to a classic salary or the payment of taxable bonuses.
- You increase team motivation and loyalty.
And all of this in a completely legal manner and in accordance with tax regulations.
How to Correctly Pay Out Tax-Exempt rewords & compensations?
- Adopt an internal management decision or a rewards policy.
- You can pay the allowance together with or separately from the salary (we accountants always recommend together, because even for the payment of the Christmas bonus, it is necessary to submit the JOPPD form 😉).
- Keep records (who received what, how much, when) – the specified amounts are tax-exempt only up to the stated annual limits!
Let the spirit of giving and gratitude enrich your business year. Seize the opportunity to delight your employees in the smartest and most favorable way.
We wish you a Happy and Rewarded End of the Year!
Your FINACRO Team!