What benefits in kind are and how they are taxed
Benefits in kind are the free use of goods or services, or getting them below market price, when they come from the employer. Their value is added to the salary: it is taxed as employment income and also increases the social security contribution base.
The general rule is that anything that is not cash is taxable, unless an exempt limit applies. Each item has its own limit, and anything above it is declared as normal salary.
Meal vouchers: up to 11 euros a day
Meal vouchers and restaurant cards are exempt up to 11 euros per working day. They must be spent in hospitality venues and cannot be accumulated or exchanged for cash.
Anything above 11 euros a day is taxed as a benefit in kind. If the company gives 15 euros a day, 11 are exempt and 4 are added to the salary.
Health insurance and training
Health insurance premiums paid by the company are exempt up to 500 euros a year per worker, and up to 1,500 in case of disability. Anything above that is taxed. The policy can also cover the spouse and children.
Training is exempt when it is needed for the job or is carried out on the company's account. If the course has nothing to do with the job, its value is taxed.
Company car: 20% a year
A car made available to a worker is valued at 20% of its purchase price per year, excluding VAT and registration taxes. That 20% is the taxable benefit.
If the car is used only for work, the valuation drops by half, to 10%. The company withholds tax on that value; if the worker covers it from their own pay, that amount is not taxed again, avoiding double taxation.
Share awards and salary sacrifice
Shares in the company itself awarded to a worker are exempt up to 12,000 euros a year, for a maximum of three tax years and with holding requirements: they cannot be sold for a period. Anything above is taxed.
Salary sacrifice is not a benefit in kind: the worker gives up part of their cash salary and the company spends it on exempt items, such as vouchers, insurance or childcare. It cannot push the salary below the minimum, and Spanish exempt limits do not apply in other countries.
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