Exempt Allowances from IRPF 2024: tax for workers’ Allowances
Patrick Gordinne Perez2024-12-28T00:11:56+00:00In this article we are going to talk about per diems exempt in the IRPF of 2024 that the company pays to the worker.
The regulations allow, within certain limits, that expenses for allowances and travel paid by the company to employees are exempt from taxation.
See below how to apply this incentive correctly.
Exempt allowances: How are allowances taxed?
Allowances exempt from taxation and tax-exempt income
Subsistence allowances: Compensation of expenses
Per diems and travel allowances of employees are remuneration paid by the company and, therefore, in principle, per diems are taxable and must be declared in the IRPF as earned income.
However, if such remuneration compensates for expenses that employees have incurred for work-related reasons, it may be exempt from taxation up to certain limits.
In the case of supplies (i.e. when the employee pays the amount of a service that the supplier provides directly to the company, issuing an invoice in the company’s name), the compensation received is also not taxed.
Employment relationship
This exemption from taxation is only applicable to income from work deriving from an employment relationship.
In other words, for the per diem to be extensive, there must be an employment contract.
It is therefore not applicable when the person receiving the allowance has a business relationship or, for example, in the case of allowances for courses, lectures and the like.
Exempt allowances: Travel expenses
Requirements for exemptsubsistence allowances
In order for travel allowances paid to employees to be exempt from taxation:
- The travel expenses must be incurred for work purposes, i.e. for the employee to carry out his work outside his usual place of work.
- Travel includes both journeys within the same municipality as the place of work and journeys to another municipality.
- However, the amounts paid to the worker for journeys from their home to the workplace are not exempt from taxation.
Public transport
If the employee travels by public transport, the amounts paid by the company to compensate him/her for the expenses are exempt.
However, the expense must be justified by means of an invoice or equivalent document.
Per diems and mileage 2024 AEAT
Private vehicle: Mileage exempt from Personal Income Tax 2024
In the event that the worker’s journey is made using their own vehicle, in 2024, the amount resulting from calculating 0.26 euros per kilometre travelled is considered exempt (until July 2023, the exemption was up to 0.19 euros per kilometre), and it is necessary to be able to justify the reality of the journey.
In addition, proven toll and parking costs are also exempt.
The number of kilometres covered by the exemption must be calculated from the employee’s departure from the workplace, not from his or her own home.
Accommodation and living expenses
Requirements for exemptper diems
Also exempt from personal income tax are the amounts allocated by the company to compensate the costs of meals and accommodation in restaurants, hotels and other catering establishments, provided that the following conditions are met:
- The travel expenses must be incurred in a municipality other than the one in which the employee’s usual place of work is located and also the one in which the employee’s residence is located. In the case of teleworking, this scheme is applicable when the commuting is to a municipality other than the employee’s place of residence.
- The worker may not travel to and stay in the same municipality (different from the usual place of work and residence) for more than nine months without interruption.
IRPF 2024 exempt allowances: Accommodation expenses
With regard to accommodation expenses, the amount exempt from IRPF is that which is justified by means of the corresponding invoice from the establishment.
Expenses incurred in hotel establishments are exempt, but not in the homes of friends or relatives or if they are part of a tourist or seasonal housing rental contract.
Exempt per diems 2024
In the case of drivers of vehicles used for the transport of goods by road, it is not necessary to justify any expenses if the amount received from the company for accommodation expenses within Spanish territory does not exceed 15 euros per day:
- Does not exceed 15 euros per day
- 25 euros per day if incurred abroad.
Per diems exempt from IRPF 2024: Meal expenses
The amounts paid by the company to employees to cover living expenses are limited to the following amounts (if a higher amount is paid, the excess is subject to personal income tax and withholding):
Amount of exempt subsistence allowances 2024
Living expenses | Spain | Abroad |
Overnight allowance 2024 | EUR 53.34 | 91,35 euros |
Without overnight stay | 26,67 euros | 48,08 euro |
Stay: the amounts to be justified without limitation.
When applying these ceilings on living expenses, it is irrelevant whether the employee has eaten a simple sandwich at the place of employment or has gone to the best restaurant.
The amounts that are exempted are those paid by the employer within these ceilings.
In the case of travel expenses with a vehicle belonging to the
employee, the payer must provide proof of the day and place of travel and the reason(s) for the journey.
Justification of per diems exempt from personal income tax
Burden of proof for exempt per diems 2024
When it comes to justifying that the per diems paid to employees are exempt from personal income tax, it is the payer (the company) who must justifyboth the day and place of the trip and the reason or work-related reason for the trip.
If this is not accredited, the tax authorities can claim the withholdings not made from the company.
For his part, the employee is obliged to complete his declaration by providing the certificates issued by the company. This can be found in the tax information of the income tax return.
And you must justify the expenses for public transport, parking and accommodation that the company has compensated you for (you must keep the receipts for these expenses).
Exempt daily subsistence allowance without fixed place of work
Conditions for exemption
As you have seen, the exemption for travel expenses covers all journeys outside the workplace.
And in the case of subsistence and subsistence expenses, in order for there to be no taxation, the journey must take place in a municipality other than the one in which the worker’s usual place of work and home are located.
Constant
Doubts arise when employees move continuously, without a fixed place of work (e.g. fibre optic installation personnel, who move to a different location every few weeks).
Well, in these cases the exemption also applies:
- What matters is where the workplace where the workers are employed is located.
- It is not necessary for them to travel first to the place of work and then to the place where the services are provided. The daily subsistence allowance is exempt even if they travel there directly from their homes.
Exempt allowances in the construction industry
If your company is in the construction business and hires its workers for a specific construction site, this site will be your place of work.
Therefore, if you pay them per diems, these will be subject to personal income tax.
However, if you move them to a different site while they are contracted for that work, the allowances you pay them for this will be exempt.
Exempt allowances IRPF Itinerant centre
Finally, if, due to the nature of your company’s activity, your workplace is itinerant (for example, circuses, street vendors, fairgrounds, etc., which change location), the allowances paid will also be exempt, as long as the journey does not coincide with the employee’s municipality.
Although in this case the journey is to the workplace itself, the rule allows for exemption.
In conclusion
Subsistence allowances paid to employees for accommodation expenses are exempt up to the amounts that are justified.
Subsistence allowances are exempt up to the limits established by personal income tax regulations.