In light of recent amendments to the Income Tax Regulation, published in the Official Gazette in early December, employees across the country can expect positive income changes from January 1 next year.
This legislative initiative increases tax-free earnings across various categories, providing employers greater flexibility in delivering benefits to their workforce. This article will highlight fundamental changes impacting employees’ financial gains and how employers can leverage these new provisions to benefit their teams.
Starting next year, employees will have more reasons to celebrate as the maximum annual amount for special awards will increase. The Ministry of Finance guidelines direct employers to grant bonuses, holiday bonuses, and similar awards up to €700, marking an increase of €36.38 compared to the current €663.62. This change offers additional financial support to employees during the holiday season and annual leave.
The work is additionally rewarded with increased rewards for the work results. From next year, the maximum amount employers can pay in the name of additional salary or salary supplements will be 1,120 euros, representing a significant jump of 124.57 euros compared to the current 995.43 euros.
Increasing rewards for work results encourages workers to be even better and motivates them to work together to achieve the company’s goals.
Employees will experience an improvement in the financial aspects of their daily lives. The maximum amount for meal allowances, currently at €796.44, will increase to €1,200 from next year. This substantial increase of €403.56 allows employees greater flexibility in maintaining healthy eating habits during the workday.
In addition to recognizing long-term service, employees will benefit from additional financial relief through increased tax-free allowances for using private cars for business purposes. Starting January 2024, the reimbursement will be €0.50 per kilometre, representing a significant increase of 25% from the current €0.40.
Employees frequently engaged in official travel will receive extra support through increased tax-free daily allowances. From next year, daily allowances for domestic business travel will increase to €30, up from the current €26.55.
In 2024, employees will experience financial relief in various life situations. Tax-free support, including disability support, family death support, long-term sick leave, and support for a deceased employee’s child, will increase to a maximum of €560 in each category.
Employees entering retirement or celebrating years of service will receive higher tax-free severance and service awards, including an increase in awards for 10, 15, 20, 25, 30, 35, and 40 years of service, providing additional recognition for their long-term contributions to work and business.
Anticipated changes in tax-free incomes bring substantial advantages for employees, creating a motivating work environment and acknowledging their dedicated contributions to the company. We expect these initiatives to enhance employees’ financial well-being, fostering a positive impact on the work atmosphere and motivation in the years to come.