Co-financing of employee holidays - tax settlement
The employer may co-finance the holidays of his employees and their families in two ways - from the current assets of his own company or from the Company Social Benefit Fund (ZFŚS). Of course, depending on the form of co-financing the employer chooses, the form of settlement of these funds will be different. How to settle the subsidy for holidays of employed employees?
Co-financing of holidays and the Company Social Benefits Fund
as of January 1 of a given year, they employ at least 20 full-time equivalent employees;
they operate in the form of budgetary units and local government budgetary establishments, regardless of the number of employees.
Employers who employ fewer than 20 people in full-time equivalents in their company may also establish a Fund if they wish. However, in their case it is not obligatory. Then, the employer may count as tax deductible costs both the amounts paid to the Company Social Benefit Fund and the amounts of holiday benefits that have been paid out. However, it is worth noting that the expenses that the entrepreneur incurred for social activities included in the provisions on the Company Social Benefits Fund are not recognized as tax deductible costs.
The act that regulates the Company Social Benefits Fund is the Act on the Fund and the regulations attached to it, which cover the issue of managing its funds. However, the law does not prohibit (after consultation with employees) choosing only one form of benefit, however, in accordance with the Act on the Company Social Benefits Fund.
If the employer decides to subsidize the employee's and his family's holidays from the Company Social Benefits Fund, this amount is not subject to contributions at all. It is also not taxed if the amount of the subsidy in the tax year does not exceed PLN 380.
Co-financing from the Social Fund is not subject to contributions, if it is confirmed by relevant documents and meets both social and material criteria. Put simply, an employer who does not want to pay social assistance contributions to his employees cannot pay everyone the same amount of money, or even give the same Christmas package.
Subsidies from the employer's current assets
If the owner of the company decided that he does not have to create the Company Social Benefits Fund, he covers the co-financing of employee holidays from the company's current assets. In such a case, this entire amount is taxable.
In a situation where holidays are organized by entities operating in the tourism industry (organization of trips, holidays and transport), and the subsidy from working capital does not exceed PLN 760 in the tax year - the amount is fully exempt from income tax. Otherwise, the entire grant will be taxed.
As for the ZUS approach to subsidies from working capital, the value of the subsidy is the basis for the social contribution, regardless of other factors.