Benefits in kind: who qualifies, and under what conditions?

Any employer can grant its employees goods or services, either free of charge or in exchange for a contribution lower than their actual value. These are known as benefits in kind. To be legal, they must comply with strict legislation, which we detail here.

‍The principle of benefits in kind

Benefits in kind must appear on the pay slip and are subject to social security contributions. They therefore appear as part of the gross salary and are deducted from the net salary paid to the employee.

Who can claim benefits in kind?

Benefits in kind are granted to:

• employees and assimilated staff;
• chairmen and executives of SAS (simplified joint-stock companies);
• chairmen-CEOs and managing directors of SA (public limited companies);
• chairmen-CEOs and directors of SELAFA (professional corporations with public limited company status);
• minority or equal-share managers of SARL (limited liability companies) or SELARL (professional corporations with limited liability status).

Calculating the value of benefits in kind

Benefits in kind are taken into account to ensure that the minimum wage is reached. To this end, their value is assessed either as a flat rate or based on their actual value.

Benefits in kind that can be expressed as a flat rate concern housing, vehicles, food, and communication tools (phone, computer, etc.). The flat rate sets a minimum value. If the employment contract or the collective bargaining agreement sets a lower value, the flat-rate amount takes precedence. Conversely, if the aforementioned documents provide for a value higher than the flat rate, that higher value must be used. With the exception of housing, the flat rate does not take the amount of remuneration into account.

The value of other benefits is estimated based on their actual value.

Benefits in kind relating to vehicles

An employer may make a vehicle available to an employee, whether owned or leased. The employee must be able to use it for both professional and personal purposes for it to be considered a benefit in kind. This is not the case if the employee must return the vehicle during weekly rest periods and holiday periods.

The benefit in kind is valued either on the basis of an annual flat rate or based on actual expenses. The latter consist of:

• Insurance;
• Maintenance costs including VAT: servicing and oil changes, tire and light replacements, etc.;
• Depreciation of the vehicle’s purchase value including VAT over 5 years, at a rate of 20% per year; beyond 5 years, the depreciation rate to use is 10%;
• Total mileage driven;
• Fuel costs.

When the vehicle is leased (with or without a purchase option), the overall annual rental amount, insurance, and maintenance costs including VAT must be added to the actual expenses.

Costs related to charging stations for electric and hybrid vehicles

An employer may provide an employee with a charging station for electric and hybrid vehicles.

If the charging station is installed at the workplace, the benefit in kind is not taken into account for personal use.

If the charging station is installed away from the workplace, the employer covers all or part of the costs of purchasing and installing it. It must also cover related costs, such as renting the charging station.

When the vehicle provided is a bike

An employer may provide an employee with a bike for commuting between home and the workplace, which is then considered a benefit in kind. However, the costs related to the bike (purchase and maintenance) are not treated as such.

Benefits in kind relating to NICT — New Information and Communication Technologies

An employer may provide tools falling under NICT, which are considered benefits in kind. These may include computers, internet plans, smartphones, software, software packages, etc.

The value is calculated either on the basis of a flat rate or actual expenses. The amount is subject to social security contributions.

Benefits in kind relating to housing

Any employer providing an employee with free housing must value the benefit and subject it to social security contributions. On the other hand, if the employer covers the rent of an employee who has signed the lease in their own name, this is no longer a benefit in kind, but a cash benefit subject to social security contributions.

Benefits in kind for housing can be estimated based on the rental value or on a flat-rate basis. In both cases, additional charges (insurance, for example) are considered cash benefits and are subject to contributions if paid by the employer. Estimates can be calculated on a weekly or monthly basis.

Benefits in kind relating to food

Benefits in kind relating to food correspond to the provision of a good or service that may be free or offered at a price lower than its value. They are calculated on a flat-rate basis. They take the form of meals in a canteen or company restaurant, or meal vouchers.

On the other hand, meals related to a necessity (during business travel, for example) may be reimbursed, but they are not considered benefits in kind.

Benefits in kind relating to products made or sold by the company

The transfer or sale at a preferential price of products made or sold by the company is not considered a benefit in kind, as a matter of tolerance. However, for this measure to apply, the price reduction must not exceed 30% of the retail price.

Furthermore, the products must come from the company itself, and not from companies within the same group. Otherwise, they are considered benefits subject to contributions, even if these discounts do not exceed 30% of the normal selling price.

Benefits in kind related to sports activities in the company

An employer can offer facilities for access to sports within the company:

• provision of equipment for collective use;
• provision of a gym owned or rented by the company;
• provision of sports equipment;
• funding of physical and sports activity services;
• funding of group physical and sports activity classes;
• funding of sporting events or competitions;
• contribution to or discount on sports passes and licenses, etc.

All these services are considered benefits in kind that should normally be subject to social security contributions. However, in order to promote sports participation within companies, they may be exempt from contributions, under certain conditions. On the other hand, individual subscriptions or enrollments for classes cannot be exempt from social security contributions.

Conditions for benefiting from the exemption from social security contributions

To benefit from the exemption from social security contributions, sports facilities must be accessible, without discrimination, to all employees of the company, regardless of the nature and duration of their employment contract.

It is up to the employer to inform employees about the facilities and arrangements in place: enrollment procedures, schedules, class timetables, locations, etc.