The lump sum is often confused with the equivalent


If employees use their private equipment or tools at the workplace, they are entitled to additional remuneration for this. Cash withdrawals are an equivalent or a lump sum, which are often confused with each other and differ from each other in terms of taxation. Withdrawals will not always be taxable.

The said exemption covers cash equivalents paid to employees for tools, materials or equipment used in the performance of work, which constitute their property (Article 21 (1) (13) of the Personal Income Tax Act). In addition, the exemption applies to equivalents paid only in cash to persons employed under an employment contract.

In the case of the allowance, however, there is a problem because the Act on personal income tax does not specify how to determine it. The legislator left this issue to the discretion of the employer, and the calculated value must correspond to the value of tools, materials or equipment used for business purposes.

Due to the determination of the amount of the benefit paid, a lump sum is a simpler form - this, however, is subject to taxation. Lump sums are paid in fixed amounts and the employer should add their value to the remaining components of the employee's remuneration and collect an advance on the income tax from their sum.