German team event tax rules: the €110 threshold

Byline: Luca von Oesen

€129 net per person sounds like a number your finance team cares about. It turns out Germany's tax authority (Finanzamt) cares just as much, just at a different point: not as a company expense, but as a benefit granted to each individual employee. And there's a fixed line for that. It's €110, it's been written into German tax law since 2015, and it's calculated gross, not net, the way many quotes list it.

Anyone booking a team event in Germany and having to justify the budget internally trips over exactly this point: is this tax-free for colleagues, or does the nice afternoon suddenly turn into a taxable benefit? The answer is in the law, it's unambiguous, and it comes down to a single calculation.

What the law actually says

Section 19 (1) sentence 1 no. 1a of the German Income Tax Act (Einkommensteuergesetz, EStG), often called the "payroll tax exemption" for company events, has regulated this explicitly since the 2015 reform. The statutory text (§ 19 EStG, gesetze-im-internet.de) says: benefits an employer grants on the occasion of a company event with a social character don't count as taxable wages, "insofar as such benefits do not exceed €110 per company event and participating employee." The rule applies to up to two company events per year, and attendance must be open to the whole company or an entire business unit. An event just for leadership already falls outside this on that basis alone.

The key word is "insofar." It turns the €110 into a tax-free allowance (Freibetrag), not a cutoff threshold (Freigrenze). In practice, the difference is everything: with an allowance, the amount up to the threshold stays tax-free, only the excess gets taxed. With a cutoff threshold, the entire benefit would become taxable the moment it exceeds €110 by even a cent. That mix-up regularly causes confusion when teams calculate their event costs, even though the legislator deliberately replaced the old cutoff-threshold logic with today's allowance back in 2015.

The calculation that changes your budgeting

The €110 is a gross figure. By law it covers "all expenses of the employer including VAT": travel, setup, materials, catering, every cost item the company pays for the event's framework, allocated per attending head. If you book a format at a net price, you first have to add VAT for the tax comparison.

Take a price tier like the one for graffiti workshops and action-painting formats: it starts at €129 net per person for smaller groups and drops with growing headcount down to €79 from 251 people. Calculating both extremes gross:

1. €129 net → €153.51 gross. That's €43.51 above the allowance. Only that excess amount is taxable as a benefit in kind, not the whole amount. That's the practical difference between an allowance and a cutoff threshold, where most questions from finance teams tend to start.
2. €79 net → €94.01 gross. That stays entirely under the €110 mark. With a large enough group, the entire per-head event price is tax-free, provided attendance is open to everyone and it's the first or second company event of the calendar year.
3. Intermediate values on the tier fall accordingly between both cases. The smaller the group, the higher the gross price per head, the more likely the threshold gets exceeded.

For the amount above the threshold, the company still has an option: it can flat-tax it at 25 percent under § 40 (2) EStG. That flat-taxed share is generally also exempt from social security contributions, instead of running as individual wage for each employee. Whether that applies in a given case, and how the flat-rate taxation gets filed correctly, is a question for payroll accounting, not a blog article.

What counts toward the €110 threshold (and what doesn't)

1. All costs of the outer framework count. Not just the event price itself, but travel, room rental, decoration, catering, and gifts connected to the event, as a sum, allocated per head.
2. Plus-ones count toward the employee's own benefit. If a colleague brings a partner, that partner's share gets attributed to the employee, not exempted separately.
3. The event has to be open to everyone. An event just for individual departments is fine, as long as it's open to everyone within that business unit. A pure leadership event falls outside the exemption.
4. A maximum of two company events per year benefit from the rule. A third celebration in the same calendar year is fully taxable, regardless of the per-head amount.
5. Non-attending employees don't artificially lower the per-head cost. Since a 2015 federal tax court (BFH) ruling, total costs are only split across employees who actually showed up, not across everyone invited.
6. The amount is an allowance, not a discount voucher. Booking above the threshold doesn't void it. Only the excess becomes tax-relevant, the rest stays covered either way.

Why this affects your format choice

A format with a high individual share, like a graffiti workshop where every team designs its own motif, naturally costs more per head than a plain tour or a talk. The €110 threshold isn't an argument against more elaborate formats, it's a line item you plan for upfront: if you're just above it, usually only a small part needs flat-rate taxation, not a reason to scrap the whole concept.

More important is group size. Since a venue's fixed costs (travel, setup, permit) spread across more heads, the gross price per person tends to drop below the threshold almost automatically as the group grows. So planning to invite several departments together rather than running separate small events often stays comfortably under the line, where a single department alone would already sit just above it.

FAQ

Is the €110 threshold a cutoff or an allowance?

An allowance. Only the amount exceeding €110 per head is taxable, not the entire benefit. That's the exact wording of § 19 (1) sentence 1 no. 1a EStG.

Does VAT count toward the €110 threshold?

Yes. The statutory text explicitly names "employer expenses including VAT." A net offer has to be grossed up before comparing it to the threshold.

What happens if we exceed the threshold?

Only the excess amount becomes a taxable benefit in kind. The company can flat-tax that share at 25 percent (§ 40 (2) EStG); it's then generally also exempt from social security contributions.

Does the threshold apply per event or per year?

Per company event and per participating employee, for a maximum of two events per calendar year. A third celebration in the same year loses the exemption entirely.

Does the event have to be open to all employees?

Yes, to everyone in the company or at least one business unit. An event exclusively for leadership doesn't meet this requirement.

This article doesn't replace tax advice. Clarify the specific application to your case, particularly the flat-rate taxation under § 40 (2) EStG, with your tax advisor or payroll accounting.

How a format like this actually runs is shown in the article team event for large groups. Anyone who wants to request their team directly in Munich can find the price tier and request form under team events in Munich.

Written and checked by Luca von Oesen, Brain2Canvas (Restless UG, Hamburg). Last updated 2 September 2026. Prices, process and references from our own events.