Why the allowance for company parties is wrong

We often only realize how important something is to us when we no longer have it. This applies to friendships, relationships and celebrations. We realized how valuable company celebrations are in 2020 at the latest, when we were no longer allowed to celebrate them. But the exemption represents an artificial hurdle.

A dinner together, a day at the amusement park or a team trip are always nice. But a big party is something completely different.

It is an opportunity to strengthen the sense of togetherness in the company and to show appreciation for the employees. Especially in times of home office, the importance of such an event cannot be overestimated.

A real holiday

In my company we are also having a big party this year. With a lavish team event in the morning and an Oktoberfest-style party in the evening. Everyone can party wildly with beer mugs, Hau den Lukas, great delicacies and a DJ who will make our marquee tremble with the right party sounds.

The exchange that takes place at such events is actually priceless. Especially when companies are very decentralized and – like us – employees work all over Europe. With us, they meet exactly once a year at the company party. I can’t and don’t want to miss that.

The spirit that prevails in the company after the company party is unique. The motivation is high and everyone is happy to give full throttle for the next year.

Allowance: The good mood is spoiled

Now that all sounds wonderful and really great. But our tax system presents me with a huge challenge every time: I’m only allowed to spend 110 euros gross per guest. Anything beyond that is considered wages and must be taxed accordingly.

Have you ever organized a party? Then you know how quickly you end up with this amount, sometimes just from the food alone. Faster than ever this year. For me as an entrepreneur, the costs for such an event do not only increase due to the general current price increase.

But because I’m now definitely over the allowance, there are additional costs that I can no longer justify. The administrative act that follows is also enormous.

Saving cannot be everything

I actually have to do everything to stay under 110 euros per person. For the team of organizers this means: cut corners and corners. And still put on a great party that lives up to all expectations.

One thing is clear: the rate of 110 euros is far too low! And even if it was not judged until 2015, in my view it is already totally outdated. Especially in times when prices have risen so massively, it is almost impossible to manage if you want to offer your team something special.

Incidentally, this use case applies to two events per year. A third company party is fully taxable and subject to social security contributions. What I don’t understand is that the money we spend on company events all goes into our economic system.

The allowance for company celebrations: An artificial hurdle

We support companies in the region, gastronomy and event technology. You shouldn’t be hindered by the state for that. I believe that this artificial hurdle is completely useless and creates unnecessary problems.

Retaining skilled workers, appreciative corporate culture and an attractive workplace in companies in Germany should be of greater value.

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