Christmas company meetings. When can the value of gifts become income?

The upcoming Easter is a great opportunity for companies to organize integration meetings for their employees. Traditional “eggs” or joint dinners are events that build ties in the team, but the question often arises – does participation in such a meeting related to the emergence of income on the employee's side?

Pursuant to applicable regulations, not every benefit received from the employer constitutes taxable income. The nature of the benefit and its relationship with the work performed are of key importance – he indicates Piotr Juszczyk, main tax advisor Infakt.

Integration meetings and income

If the Christmas meeting is integrationis available to all employees and does not involve individual material benefits, participation does not generate income for the employee. An example would be a joint meeting at the Easter table without giving gifts of considerable value. In this case, as Piotr Juszczyk emphasizes, there is no obligation to pay income tax or social security contributions.

Additional benefits – a potential source of income

However, when during the meeting employees receive specific benefits of material value, such as vouchers, gift cards or expensive giftsthe situation changes, emphasizes the expert. In this case, they may be considered as income from the employment relationship, which is associated with the need to pay income tax and ZUS contributions. It is important that the employer takes into account the value of these benefits when calculating the income tax advance.

Company Social Benefits Fund – exception to the rule

Piotr Juszczyk also draws attention to the possibility of exemption from taxing some benefits. If the gifts are financed from the company Social Benefits Fund (ZFŚS) and meet certain conditions, they can benefit from a tax exemption up to PLN 1,000 per year. It is worth adding that this form of benefits is particularly about gifts of low value, which are intended for a wide group of employees.

Donations – a bit of generosity will not hurt

When the boss decides to give employees small presents, the situation is a bit different, notes the tax advisor and adds that such Gifts can be treated as donations, which if they are in the amount of PLN 5,733 within five yearsare subject to tax exemption. However, if the value of donations exceeds this amount, the employee will have to pay tax on the surplus.

To sum up, Piotr Juszczyk indicates that participation in a Christmas meeting organized by the employer does not cause the employee's revenue. However, if an employee receives additional material benefits, e.g. vouchers or gifts, it is necessary to recognize their value and determine whether they are taxable income. It is worth remembering that the rules in this matter are clear, but they still leave space for interpretation in the case of small gifts or lower value benefits.

Source: