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Workplace health promotion in the fitness studio

Under Section 3 no. 34 of the German Income Tax Act, employers are able to provide an attractive benefit to their employees in the form of tax-free benefits for health promotion up to a value of €600 per year.

The BMF circular of 20.4.2021 specifies which benefits are included here. Besides classes to enhance mental and physical fitness, such as, for example, nutritional counselling or quitting smoking, there is also encouragement to visit the fitness studio in the form of tax-free employer subsidies. However, the condition for tax-privileged subsidies is that they have to be paid in addition to the regular salary. Furthermore, only classes such as yoga, pilates or back workouts are tax-privileged via the €600 allowance, but not purely training with gym equipment. Here, one option is for the employer to become the contractual partner of the fitness studio so that the staff can take part in a selection of tax-privileged health classes there. Alternatively, employees can also subsequently have the costs of taking part in certified classes in other studios reimbursed by their employers – exempt from tax and social security contributions – insofar as their health insurance schemes do not pay a subsidy. A certificate of attendance for the class can serve as proof.

Furthermore, in addition to the regular salary payment, employers have the option to use the exemption limit for payments in kind of €50 per month – exempt from tax and social security contributions – to subsidise the fitness studio membership fees of individual employees up to this amount. In this case, it is unimportant whether the employee takes part only in eligible classes or trains freely on gym equipment. The exemption limit for payments in kind can be used to the effect that the employer pays the basic amount of €50 directly to the selected fitness studio where the employees are then able to do their fitness training. Alternatively, employers can also hand out €50 vouchers to their employees every month that can be redeemed in a specific fitness studio. It is frequently possible to negotiate discounted membership fees if the employer negotiates a corporate fitness contract with a fitness studio. If the monthly amount is then still above the €50 exemption limit then only the exceeding amount will have to be paid by the employees themselves.

Please note: The €600 tax-free allowance and the monthly €50 exemption limit can be combined with each other so that an annual tax-free bonus of up to €1,200 for workplace health promotion would be possible.

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