In order to offer employees an allowance for the daily car journey from home to work, many companies work with fuel vouchers. These can be given out tax-free as Non-cash benefits up to a limit of 50 euros each month. We explain how this works, what the advantages and disadvantages are and what alternative is possible.
How fuel vouchers for employees work
Classically, companies buy fuel vouchers from a specific petrol station chain or a specific petrol station and issue these vouchers to their employees. The employees can then pay with the fuel voucher at the petrol station.
The fuel vouchers are issued in addition to the monthly salary and are therefore not a direct salary component on which wage tax and social security contributions are due. However, maximum limits must be taken into account.
With employee benefits such as petrol vouchers, companies can offer their employees additional benefits above and beyond their wages and thus increase their attractiveness as an employer and strengthen employee loyalty.
Legal requirements for all aspects of the fuel voucher
- A tax-free fuel voucher is treated like all other tax-free Non-cash benefits. Accordingly, petrol vouchers are non-cash and may not be paid out.
- Fuel vouchers are a voluntary benefit provided by the employer. Employees have no legal entitlement to these Non-cash benefits.
- If the exemption limit of 50 euros per month is observed, the petrol vouchers are exempt from social security contributions and tax. This limit was raised in 2022. The Income Tax Act §8 serves as the legal basis for issuing petrol vouchers as Non-cash benefits.
- Fuel vouchers are important to ensure Non-cash benefits. Own fuel invoices can no longer be submitted retrospectively as Non-cash benefits.
Important: If several Non-cash benefits are granted in companies, these together may not exceed the value of 50 euros gross per month if they are to remain tax and duty free. The tax exemption limit per year is 600 euros.
Fuel voucher - disadvantages at a glance
Fuel vouchers initially offer a tax-free allowance in addition to pay. However, they are also associated with some disadvantages:
- Fuel vouchers can only be used to support employees who come to work by car.
- Issuing and administering petrol vouchers requires a comparatively high level of effort.
- Employees are often not flexible when redeeming the vouchers.
- By supporting cars with combustion engines, no incentive is given for sustainable mobility solutions.
- By purchasing fuel vouchers, companies make themselves more dependent on a particular provider.
The alternative to the fuel voucher: mobility budget
In order to adapt to the changing demands regarding mobility, companies can offer their employees a mobility budget instead of a fuel voucher. This allows them to freely choose which means of transport they want to use the allowance for. At the same time, companies can promote environmental awareness among their employees, who are rewarded for choosing environmentally friendly means of public transport with tax-free benefits. This means that employees are not limited to a specific means of transport, but can choose a mobility solution that suits their life and work situation.
The Circula app makes it child's play to create, manage and use mobility budgets. At the same time, companies keep track of their Non-cash benefits and thus ensure that employee benefits can be used optimally.