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Employment Income Taxation
JECHOVÁ, Pavlína
The primary aim of the bachelor{\crq}s thesis was to analyse the provided fringe benefits and consequent tax burden on salaries in a selected company, to analyse several financial products that are suitable for the application of fringe benefits available in the Czech Republic, to assess suitability of the selected fringe benefits in the company in terms of the stabilisation and motivation effects, and to identify whether any of the selected forms of the benefits lead to an excessive tax burden on both the employees and employer with regard to the direct tax implications. The employer ordinarily provides fringe benefits from the social fund. Appropriateness of fringe benefits for the employer and employees depends on three basic aspects: exemption of the fringe benefit from natural person income tax, inclusion of the fringe benefit in tax deductible expenses and exclusion of the fringe benefit from the basis of assessment of social security and health insurance payments. Depending on the degree of compliance with the above-mentioned requirements the individual benefits can be divided {--} in terms of tax implications {--} into three groups: optimum benefits, i.e. fringe benefits that are exempt from natural person income tax, that are not part of social security and health insurance payments assessment basis and that are tax deductible; acceptable benefits, i.e. benefits that comply with at least one of the aforesaid requirements in line with the applicable legislation; unfavourable benefits, i.e. benefits comprising all the disadvantages (yet, such benefits are frequently provided and in the end they are motivating). The most common forms of fringe benefits include meals at reduced prices, extra days of annual holiday and supplementary pension insurance. There has been a growing interest in benefits focused on wellbeing, healthy life style, leisure time and family care.
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