Tax Impacts of Different Growth & Development Benefits
A description of tax impacts of different Growth & Development reimbursements by countries.
Introduction
The reimbursement of Growth & Development benefits may be considered as taxable income in some countries. Subject to changing local legislation, the table below outlines what the tax impact might be on receiving Growth & Development reimbursements from GitLab.
Tax Impact Table
| Country | Category | Tax Impact |
|---|---|---|
| United States | Academic Study | If GitLab pays over $5,250 for educational benefits for you during the year, you must generally pay tax on the amount over $5,250 |
| Your 4th Trimester Coaching | TBD | |
| Professional Coaching | TBD | |
| English Language Courses | If GitLab pays over $5,250 for educational benefits for you during the year, you must generally pay tax on the amount over $5,250 | |
| Professional Development/Certifications/Licenses | If GitLab pays over $5,250 for educational benefits for you during the year, you must generally pay tax on the amount over $5,250 | |
| Professional Dues/Membership | TBD | |
| Workshops and Conferences | TBD | |
| Self-Service Learning (LinkedIn Learning, Coursera, Others) | TBD | |
| South Africa | Academic Study | Generally, any bona fide scholarship or bursary granted to enable or assist any person to study at a recognised educational or research institution is exempt from normal tax. This exemption is, however, subject to certain conditions, particularly where the scholarship or bursary is granted by an employer (or an associated institution in relation to that employer) to an employee or to a relative of such employee. |
| Your 4th Trimester Coaching, Professional Coaching, English Language Courses, Workshops and Conferences, Self-service learning (Linkedin Learning, Coursera, others) | Expenditure in connection with in-house or on-the-job training or courses presented by training institutions for or on behalf of employers does not represent a taxable benefit in the hands of the employees of the employer if the training is job-related and at the employer’s premises. This is in terms of paragraph 10(2)(c), which provides that no value will be placed on the benefit derived by employees on services rendered by the employer to his or her or its employees at their place of work for the better performance of their duties. | |
| Professional development/ certification/ licenses, Professional dues/ membership | EXEMPT IF CRITERIA ARE MET Employer-paid professional fees, if such membership is a condition of employment | |
| Australia | Academic study, Your 4th Trimester Coaching, Professional coaching, English language courses, Professional development/ certification/ licenses, Professional dues/ membership Workshops and Conferences, Self-service learning (Linkedin Learning, Coursera, othera) | Broadly speaking if you are reimbursing an employee for any out-of-pocket expenses they have incurred, no taxation would apply. However, if the intent of the business is to give the employee an allowance to cover the costs of the below, then there would be scope for the payment to be taxable. The client’s company accountant would be the one to make the determination based on the nature of the payment and once that determination has been reached we can treat it accordingly in the payroll Paypac: In that case this is definitely up to the determination of the company accountant/BAS Agent. As the creation and lodgement of FBT returns are outside of the scope of payroll, we are not able to make this determination on behalf of the client. A resource that they can consult for this is here: https://www.ato.gov.au/General/Fringe-benefits-tax-(FBT)/Types-of-fringe-benefits/. In reading through the page and the below, the items appear to closely look like the examples of expense payment fringe benefits but again, that is just my opinion and I would still rely on their accountant to make this decision. However, once that determination is made and if there are reportable FBT amounts that need to be reported for employees on the STP file, we can record these for the client. |
| Germany | Professional Development (Weiterbildung) | According to section 1.2 of this article professional developement (Weiterbildung) paid by the employer is tax free. |
| Hungary | Academic study, Your 4th Trimester Coaching, Professional coaching, English language courses, Professional development/ certification/ licenses, Professional dues/ membership Workshops and Conferences, Self-service learning (Linkedin Learning, Coursera, othera) | In principal training and education costs shall be recorded as expense of the company so ideally these are not staff costs. Only if there are no invoices issued in the name of the Company and we need to reimburse the cost to the employee. In this case this is taxable as regular salary, so e.g. if we reimburse net HUF 100.000 to the employee it means it is run through payroll as cca. gross HUF 150,000 and employer’s contribution is 17% on top of this. |
| Mexico | Academic study, Your 4th Trimester Coaching, Professional coaching, English language courses, Professional development/ certification/ licenses, Professional dues/ membership Workshops and Conferences, Self-service learning (Linkedin Learning, Coursera, othera) | In MX, all these expenses can be non-taxable, as long as the employee provides an invoice adressed to the employer’s local legal entity. (the invoice needs to have the employer’s tax number “RFC”) So if the employee can provide an invoice addressed to Remote’s legal entity in Mexico, it can be processed as non-taxable. Please note that it will requiered to be an invoice and not a receipt since those are not valid for tax purposes. |
| Austria | Academic study, Your 4th Trimester Coaching, Professional coaching, English language courses, Professional development/ certification/ licenses, Professional dues/ membership Workshops and Conferences, Self-service learning (Linkedin Learning, Coursera, othera) | Costs are deductible for the employer if the training is in regard to the employee’s current profession or to a similar work. It is important that the training is based on an entrepreneurial/professional requirement. If the training is based on private cause then this is subject to tax if employer grants reimbursement. The tax may differ dependent on each case - we need the employee’s info to give more details. |
| Netherlands | Academic study, Your 4th Trimester Coaching, Professional coaching, English language courses, Professional development/ certification/ licenses, Professional dues/ membership Workshops and Conferences, Self-service learning (Linkedin Learning, Coursera, othera) | it’s allowed and tax free to pay for conferences and college fees for employees in the Netherlands as long as they need this for their job. When we can document that the employee needs this to be able to do their work properly than it’s fine to pay for this from the company and its tax free. The employee cannot deduct the costs for these in their income tax return because the company paid for it. |
| United Kingdom | Academic study, Your 4th Trimester Coaching, Professional coaching, English language courses, Professional development/ certification/ licenses, Professional dues/ membership Workshops and Conferences, Self-service learning (Linkedin Learning, Coursera, othera) | Tax-free with the exception of Trimester coaching which doesn’t sound business related. |
| Switzerland | Academic study, Your 4th Trimester Coaching, Professional coaching, English language courses, Professional development/ certification/ licenses, Professional dues/ membership Workshops and Conferences, Self-service learning (Linkedin Learning, Coursera, othera) | A Swiss worker every year can submit valid expenses to the Swiss administration and might have a rebate on some amount. Taxation rules are different from one Canton to another. As these questions are related to tax a tax adviser would be better to answer these questions. |
| Italy | Academic study, Your 4th Trimester Coaching, Professional coaching, English language courses, Professional development/ certification/ licenses, Professional dues/ membership Workshops and Conferences, Self-service learning (Linkedin Learning, Coursera, othera) | Unfortunately the below list refers to taxable expenses. Since the taxable expenses and allowance has the same rate of taxation, we would suggest to include a monthly (or eventual) Wellness Allowance (gross) which will be paid to the employee and recorded in the addendum. In this way the employees will avoid the expenses submitting process as well as GitLab will avoid to approve them. |
| Brazil | Academic study, Your 4th Trimester Coaching, Professional coaching, English language courses, Professional development/ certification/ licenses, Professional dues/ membership Workshops and Conferences, Self-service learning (Linkedin Learning, Coursera, othera) | Any of the items below can not be taxable if it is just sent as expense reimbursement. If the requirement is to advance an amount for reimbursement, it would be required to invoice the amount first, and when the employee requires to but any item, the ICE will make the deposit so the employee can buy and in the moment sends the vouchers to the ICE. |
| Japan | Academic study, Your 4th Trimester Coaching, Professional coaching, English language courses, Professional development/ certification/ licenses, Professional dues/ membership Workshops and Conferences, Self-service learning (Linkedin Learning, Coursera, othera) | Payment that considering learning / Education, will be Non-Taxable & There will be no impact on Social Insurance & Labor insurance as well. |
Last modified December 18, 2023: Reword Gitlab to GitLab (
808a859f)
