Today: A company car for private use is the gold standard among non-cash benefits.

Would you like to strongly motivate your employees and bind them to your company? Then think about company cars for private use. There are many advantages, including tax benefits. Here is the most important information on taxation.

The pecuniary advantage

Private use is taxable as a "non-cash benefit". And the amount of the benefit is determined

- either with a logbook
- or generally via the "1-% method"

The wage tax

When deducting income tax, it is best to apply the 1-% method. This means that your employee pays tax on 1 % of the domestic gross list price of the vehicle (including VAT) each month.

Example: Your employee receives a company car worth 40,000.00 euros, which he may also use privately. You charge him a benefit of 400.00 euros per month, which he pays tax on via payroll accounting.

Tax hack: If your employee can prove a lower private usage benefit to the tax office in his income tax return using a logbook, he will get back any excess income tax withheld!

Advantage for electric vehicles

If you buy an all-electric company car, your employees only have to pay tax on a quarter of the 1-% benefit, i.e. effectively only 0.25 % of the gross list price.

This applies to vehicles with a gross list price of up to 100,000.00 euros and if purchased by December 31, 2030.

More expensive electric vehicles are subject to a 0.5 % advantage tax.

Und another advantage for you as an employer

Purely electric vehicles that you purchase by 31.12.2027 can even be depreciated as follows thanks to the German government's new tax investment program:

75 % (!) in the year of acquisition 
✅ 20 % in the 2nd year
✅ 5 % in the 3rd and 4th year 
✅ 3 % in the 5th year 
✅ 2 % in the 6th year

👉 Do you have questions about salary extras? We have the answers.
Contact us and we will be happy to assist you with your tax questions and issues: www.wsb-berater.de/kontakt

#Company car #Employee retention #Salary extras #TTax tips #WSB