If an employer provides an employee with a motor vehicle free of charge for both business and private use, an amount equal to 1% of the vehicle's acquisition cost is considered the employee's (non-monetary) income for each calendar month (including partial months) in which the vehicle is made available. It does not matter whether the employee actually uses the vehicle for private purposes — what matters is whether the vehicle is available to them for private use.
The acquisition cost of the vehicle refers to the acquisition cost as defined in Section 29 of the Income Tax Act (No. 586/1992 Coll.) — i.e., the cost used for valuing the vehicle for tax depreciation purposes. However, if value added tax is not included in the acquisition cost, the acquisition cost is increased by this tax for these purposes, even for VAT payers — regardless of whether they claimed VAT in full, in a reduced amount, or not at all.
The free use of a company vehicle for both business and private purposes is considered a so-called non-monetary benefit for the employee, and the payroll component "% of vehicle" is used for this purpose.
Navigate to the employee's personnel record and enter a standing payroll component.
Standing payroll component -
Employees -> HR -> Standing payroll components - use the "New" button to add a new payroll component. Use the magnifying glass icon to select % of vehicle and fill in the date and the amount representing the calculated value.
Payroll component list - > % of vehicle
The amount representing 1% of the vehicle's acquisition cost increases the assessment base for social insurance, health insurance, and advance income tax. However, the payroll calculation is correctly based on the original salary base. The net pay disbursed is correct.
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