The director’s salary of €51,000, a travel allowance of €0.21 per kilometre and various other amounts relevant to payroll tax can be found in the recently published annex in the Payroll Tax Newsletter.
Director’s salary
Under the customary salary scheme, the salary received by the director and major shareholder (DGA) of a private limited company must be at least €48,000. For 2023, this will be increased to €51,000. Directors and major shareholders who wish to receive a salary of less than €51,000 must demonstrate that this is in accordance with the customary salary scheme. A higher salary must be justified by the Tax and Customs Administration.
Another change to the customary salary scheme is that the efficiency margin is being abolished. If the customary salary exceeds €48,000 (2023: €51,000), the salary paid to the director and major shareholder must amount to at least 75% of the customary salary. From 2023, this will rise to 100%. Please note: there are further rules that apply under the customary salary scheme.
Standard amounts
That the maximum tax-free allowance for travel for commuting and business purposes is to be increased from €0.19/km to €0.21/km was already known. It was also already known that the tax-free allowance for working from home would be increased from €2.00 per day to €2.15 per day.
The flat-rate value of a meal of no more than a minor business nature, consumed at the workplace (“canteen meal”), is increased from €3.35 to € 3,55 (per breakfast/lunch/dinner).
According to the Payroll Tax Newsletter, the amounts under the tax scheme for volunteers were to remain unchanged. However, the Tax and Customs Administration has stated that this was incorrectly reported in the Newsletter. In 2023, a volunteer may receive a maximum of €1,900 (previously: €1,800) per year and €190 (previously: €180) per month in allowances and benefits in kind. A person is considered a volunteer if the amount received per hour (these amounts will not change for 2023) does not exceed €5 (volunteers under the age of 21: €2.75). The rules for volunteers on social security benefits are likely to be relaxed shortly. See our article Rules for social security recipients have been relaxed.
The allowance under the work-related expenses scheme for 2023 amounts to 1.18% of the total wage bill, on the understanding that the allowance for the first €400,000 of the total wage bill amounts to as much as 3%.