Employee benefits are not always tax-free
Companies often provide employees with various benefits in addition to their regular salaries. These may include company cars, insurance policies, accommodation and other non-cash benefits.
Although such benefits are a common way to reward employees, they may qualify as taxable benefits in kind and must therefore be included in payroll calculations.
A taxable benefit in kind generally arises when an employer provides an employee or their family member with a personal benefit connected to employment.
Correct tax treatment is essential for both personal income tax and social security contribution purposes.
Company cars used for private purposes
One of the most common taxable benefits is the private use of a company vehicle.
When an employer allows an employee to use a company car for personal purposes, the relevant benefit-in-kind valuation rules must be considered.
For conventional passenger vehicles, the starting point for the monthly taxable benefit is generally 1.5% of the vehicle’s acquisition value, subject to statutory adjustments.
The taxable value may also depend on the age of the vehicle, the extent of private use and whether the employer pays for fuel used on private journeys.
Special rules apply to certain electric vehicles, meaning they should not automatically be treated in the same way as petrol or diesel vehicles.
Insurance and other employee benefits
A taxable benefit may also arise when an employer pays for certain insurance policies, provides accommodation or covers other personal expenses.
However, not every employer-funded expense automatically constitutes a taxable benefit.
Slovenian legislation provides exemptions and special tax treatment for certain categories of benefits.
It is important to distinguish between expenses incurred for business purposes and benefits primarily intended for an employee’s personal use.
Are employee training courses taxable benefits?
Companies frequently finance professional training, seminars and educational programmes for their employees.
Where training is connected to business needs or the employee’s work responsibilities, it is generally not treated as a taxable benefit in kind.
A different assessment may be required where the training primarily serves the employee’s personal interests.
Employers should therefore maintain appropriate documentation explaining the business purpose of the training.
How do benefits in kind affect payroll?
Taxable benefits in kind generally increase the employee’s taxable employment income and may also affect the social security contribution base.
This means an employee may receive a benefit without receiving additional cash, while its value is still reflected in payroll calculations.
Incorrectly recording benefits can result in inaccurate payroll reporting and additional liabilities during a tax inspection.
What should employers review before year-end?
Businesses should review the benefits they provide and verify how those benefits are recorded.
Particular attention should be paid to company cars, insurance policies, personal expenses paid by the employer and other non-cash benefits.
Employers should also ensure that all relevant information is correctly communicated to their accounting or payroll provider.
K2A advises
👉 Before the end of 2026, review whether all employee benefits are being treated correctly for tax purposes. Pay particular attention to company cars, insurance and benefits provided for private use.
At K2A Accounting, we assist businesses with payroll calculations, employee benefits and related tax obligations.