1. The theory: where does the benefit come from? 🤓
You don't have to pay taxes on the actual value of a multimedia device. This is because at Payflip, we work with a usage period/provision period. You can find the exact duration of this period in Payflip under the details of the benefit.
What are you taxed on then?
For multimedia devices (smartphone, tablet, and laptop), there is a fixed benefit in kind. This amounts to 3 EUR/month for a smartphone and tablet, and 6 EUR/month for a laptop. Net, this means you pay approximately 1.43 EUR/month for a smartphone or tablet and 2.87 EUR/month for a laptop.
In the case of a smartwatch, a one-time benefit in kind of 50% of the device's value will be applied.
Additionally, for all types of devices, a residual value (worth 20% of the purchase price) will apply. This residual value is processed as a benefit in kind on your payslip. More details about this residual value can be found in this article.
In the following numerical examples, we use some standard percentages to clarify these principles. Be aware that in your personal situation, these percentages might slightly differ. In Payflip, you can always consult the correct simulations for your situation.
Example 1: Smartphone ☎️
Let's take a smartphone with a value of 1000 EUR and a usage period of 24 months as the first example.
To choose this smartphone, you will need to invest approximately 1075 EUR of your Payflip budget. The details on how this cost is precisely calculated can be found in this article.
During the usage period, a fixed benefit in kind of 3 EUR/month will be charged. On this benefit in kind, you pay social security contributions and income tax.
fixed benefit in kind | 3 EUR x 24 = 72 EUR |
Employee social security contributions (13.07%) | 9 EUR |
Withholding tax (45%) | 28 EUR |
Total net cost of benefit in kind | 9 + 28 EUR = 37 EUR |
Additionally, at the end of the usage period, a benefit in kind worth 20% of the purchase price of the device will be charged as residual value. You will also pay social security contributions and withholding tax on this benefit in kind.
fixed benefit in kind | 1000 x 20 % = 200 EUR |
Employee social security contributions (13.07%) |
|
Withholding tax (45%) | 78 EUR |
Total net cost of benefit in kind | 26 + 78 EUR = 104 EUR |
In total, you will pay approximately 37 EUR + 104 EUR = 141 EUR in taxes when you choose this smartphone.
So, what is the benefit?
Let's take a look at how much cash you would receive if this amount were paid out as a traditional year-end bonus (for other Payflip budgets, it's a different but similar calculation):
Equivalent year-end bonus (employer cost) | 1075 EUR |
Employer social security contributions (28%) | - 301 EUR |
Gross year-end bonus | 774 EUR |
Employee social security contributions (13.07%) | - 101 EUR |
Withholding tax (45%) | - 302 EUR |
Net amount | 371 EUR |
💥 With the same budget of 1075 EUR in Payflip, you get a smartphone worth 1000 EUR on which 141 EUR in taxes are applicable, instead of a cash payout of 371 EUR. Talk about a financial win. 💥
Example 2: Smartwatch ⌚
For the second example, let's take a smartwatch with a value of 500 EUR and a usage period of 24 months.
To choose this smartwatch, you will need to invest approximately 587 EUR of your Payflip budget. The details on how this cost is precisely calculated can be found in this article.
At the time of your choice, a one-time benefit in kind worth 50% of the cost price of the smartwatch will be charged. You will pay social security contributions and withholding tax on this benefit in kind.
fixed benefit in kind | 500 x 50% = 250 EUR |
Employee social security contributions (13.07%) | 33 EUR |
Withholding tax (45%) | 97 EUR |
Total net cost of benefit in kind | 33 + 97 EUR = 130 EUR |
Additionally, at the end of the usage period, a benefit in kind worth 20% of the purchase price of the device will be charged as residual value. You will also pay social security contributions and withholding tax on this benefit in kind.
fixed benefit in kind | 500 x 20 % = 100 EUR |
Employee social security contributions (13.07%) | 13 EUR |
Withholding tax (45%) | 39 EUR |
Total net cost of benefit in kind | 13 + 39 EUR = 52 EUR |
In total, you will pay approximately 130 EUR + 52 EUR = 182 EUR in taxes when you choose this smartwatch.
So, what is the benefit?
Let's take a look at how much cash you would receive if this amount were paid out as a traditional year-end bonus (for other Payflip budgets, it's a different but similar calculation):
Equivalent year-end bonus (employer cost) | 587 EUR |
Employer social security contributions (28%) | - 164 EUR |
Gross year-end bonus | 423 EUR |
Employee social security contributions (13.07%) | - 55 EUR |
Withholding tax (45%) | - 165 EUR |
Net amount | 203 EUR |
💥 With the same budget of 587 EUR in Payflip, you get a smartwatch worth 500 EUR on which 182 EUR in taxes are applicable, instead of a cash payout of 203 EUR. Again, a nice financial win. 💥
2. In practice: where can I check this benefit for my situation? 🤑
When you choose a multimedia device in the Payflip tool, your financial benefit is always simulated under 'Benefit compared to cash payout'. 👇
This figure takes into account all the components described above. Additionally, it considers your specific situation (such as the withholding tax percentage that needs to be applied) so you can make an informed decision. 🌟