In some professions, employers pay their employees what is known as tool money. The amount of money paid for this is a tax-free benefit. For a tax-correct compensation, however, some basic aspects must be observed.
Definition / explanation
In some professions, it is common for workers to use their own tools in the workplace. Compensation to an employer for the operational use of tools owned by an employee is referred to as tool money.
Only hand tools are regarded as tools within the framework of the existing tax regulations. These must be able to be used for processing or manufacturing objects. Personal computers, typewriters and musical instruments, for example, are expressly excluded from the regulations on tool money.
Tax bases and limit values
Tool money is a tax-free service by the employer according to Section 30, Paragraph 30 of the Income Tax Act (EstG). However, the employer's performance may not obviously exceed the expenses of an employee in this regard.
Furthermore, the purchase costs for each individual tool must not be higher than the amount of 410.00 EUR (excluding statutory VAT). Up to this amount, an acquisition is considered to be a so-called “minor asset” for tax purposes.
Lump-sum compensation without individual proof of the actual expenses can be claimed at regular intervals as a deduction in connection with the wear and tear of the tool (depreciation).
Ebenfalls ohne Beleg, werden die üblicherweise entstehenden Kosten für den business, die Instandhaltung und die Instandsetzung des Werkzeuges vom Fiskus akzeptiert. Auch für entstehende Kosten im Rahmen einer Beförderung der Werkzeuge besteht keine Belegpflicht.
If, on the other hand, the employee is paid compensation for the time spent maintaining and cleaning the tool, this compensation is not tax-free. Such compensation is counted as wages and is taxable.