With salary conversion, employees convert a portion of their taxable and social security liable gross salary into a tax-free credit for meals and groceries. The result: more net income from the gross salary – without additional costs for the company.
⚠️ Note: This information is for your reference only and does not constitute tax or legal advice. If you have any questions, please contact your tax advisor.
The Principle
Instead of a traditional salary increase – where a large part is lost to taxes and social contributions – a portion of the gross salary is converted into a tax-free meal allowance. This effectively gives the employee more net income without additional costs for the company.
What changes for employees?
- The gross salary is reduced by the agreed amount
- In return, employees receive monthly tax-free reimbursements for workday meals via Hrmony
- Overall, this results in a monthly net gain of up to €50 (or €600 per year)
What changes for the company?
- No additional costs: Since the gross salary is reduced accordingly, no extra costs arise
- Savings on ancillary wage costs: Employer contributions to social security decrease due to the reduced gross salary
- No additional administrative effort: Hrmony handles the receipt verification and provides the payroll file
Salary conversion vs. on-top payment
| Salary Conversion | On-Top to Salary | |
|---|---|---|
| Gross Salary | Is reduced | Remains unchanged |
| Costs for Employer | Budget neutral | Additional costs |
| Ancillary Wage Costs | Decrease | Remain the same |
| Net Gain for Employees | Up to €50/month | Up to €50/month |
| Suitable for | Permanent employees | Mini-jobbers, working students, trainees |
Important: In salary conversion, it must be ensured that the statutory minimum wage is not undercut. For mini-jobbers and working students, the on-top option is therefore recommended.
Further Information
- 📄 Can the meal allowance also be implemented as salary conversion?
- 📄 How does Hrmony calculate the reimbursement for employees?
- 📄 What credit can I provide to employees?
Still have questions? Our Operations Team is happy to assist you: 📧 operations@hrmony.de