Employers who are taxpayers may increase non-monetary benefits provided to their employees to the amount calculated according to a formula stipulated by the amended Act.
The final amount calculated in this way - "a gross-up" of income - falls under the income from employment. Such increases, together with the non-monetary income, will be classified as taxable income from employment.
Gross-up of income shall not be applicable in the following cases:
- income in the form of remuneration for a chairman, a member and a secretary of an election commission, a chairman, a member and a secretary of a referendum commission, and for a census commissioner
- non-monetary income provided to former employers, early old-age pension recipients, old-age pension recipients, and pension for years of service recipients
- non-monetary income in the form of the company car benefit used also for private purposes of the employee.
The principle of the "gross-up" is that the employer will increase the non-monetary income by a tax and insurance contribution advance payment and by contributions which employees are obliged to pay for the health and social insurance. The non-monetary income increased in this way shall be included in the taxable income of an employee for a calendar month or an accounting period.
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