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Through flexible remuneration, the worker can allocate a part of their remuneration to obtain certain goods or services, with the company assuming payment for them.

In this way, the organization becomes a provider of services to the workers and sometimes this results in a lower tax burden, since some of this income in kind is exempt from personal income tax if the conditions for it are met.

This type of remuneration is sometimes established in the collective agreement. If this is not the case, it must be agreed between the company and the worker, either at the time the employment contract is signed, or in a subsequent agreement to modify the contractual remuneration conditions, which will be attached to the employment contract.


Once agreed, the first condition to consider the personal income tax exemption is that the employer performs itself, or contracts with an authorized third party, the benefit from which the worker will benefit. Otherwise, if the employer limited himself to reimbursing the expense borne by the workers, we would find ourselves before a monetary compensation subject to income tax.

Work income in kind that is considered exempt from taxation is listed in article 42.3 of the Personal Income Tax Law and in articles 43 to 46 bis of the Personal Income Tax Regulation. Among them are:

The dining room or commissary service of a social nature

Whether it is carried out in company canteens or canteens, or if the company contracts with an external catering establishment to carry it out, provided that it is used on weekdays and no subsistence allowances are accrued during those work days. It should be added that if the service is offered through a third party, the cost of the dining room must not exceed €11 per day (if it is exceeded, the excess will be subject to tax), and if vouchers or cards are given for its use to employees, a record must be kept of the vouchers delivered, having to be numbered, by name and with the identification of the employer, these being non-transferable and non-cumulative.

The use of assets for social and cultural activities

Such as social clubs or sports facilities. Likewise, this includes aid for the first cycle of early childhood education for the children of workers, through premises set aside for this by the company or by being contracted with authorized external entities.

The contract with third parties for private health insurance

For the employee, their spouse and their descendants, as long as the coverage covers the employee himself and €500 per year is not exceeded for each of the insured persons, or in the case of disability, €1.500 per year. It will be taxed, where appropriate, for the excess of the above amounts.

the provision of education

Preschool, infant, primary, compulsory secondary, baccalaureate and professional training by authorized educational centers, to the children of employees.

Payment of public transport service

For commuting between the worker's home and the workplace with a limit of €1.500 per year. There are indirect payment formulas such as delivery of registered, numbered, non-transferable transport cards and being registered. The amount that exceeds the limit of €1.500 per year will be subject to taxation.

delivery of shares or company shares

Or of the companies that form part of the group, with a limit of €12.000 per year, if the purchase offer is made under the same conditions for all employees, and provided that each one of them together with their spouses or relatives up to the second degree do not have a stake in the company greater than 5%. These shares must be held for at least 3 years. In the case of emerging companies under the terms of Law 28/2022 of December 21, promoting the ecosystem of emerging companies, the limit is established at €50.000 per year. Exceeding the limit or failing to meet any of the requirements will be subject to tax.


For the purposes of Social Security contributions, all these payments made by the company as work income are not considered exempt, according to article 147 of the General Social Security Law, and therefore form part of the contribution bases.

Despite this, flexible remuneration can be an advantage over the more classic remuneration formulas. Since, by way of example, a worker who receives an annual gross of €25.000 and receives as part of his salary the consideration of medical insurance for himself, his spouse and his son, valued at €1.500 per year. At the same time, the company offers a childcare service valued at €2.400 per year. Generally, the IRPF withholding percentage on your payroll can be reduced to almost three points, which shows a substantial reduction in the fiscal aspect. However, future Social Security benefits will not be affected, since you will contribute based on your total gross salary.

Amparo Casares Andres

Collaborator Labor Area of ​​Tomarial

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