Employer loan

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Company Loans (rare: employee loans ; English employee loans ) are loans of the employer to his employees as part of fringe benefits .

General

An employer loan also turns the employer into a lender , and the employee also becomes a borrower . The credit relationship thus appears as a further permanent obligation in addition to the existing employment relationship . The employer loan is used by employees to finance their consumption or construction financing and makes them more independent of bank loans ; the employer can use it as a means of employee loyalty. In the case of wages and salaries being assigned in favor of the employer, the employer can deny other creditors of the employee access to the earned income . As a lender, the employer has a lower credit risk than credit institutions because he can largely control the wages that are important for debt servicing and the termination of the employment relationship himself.

There are employer loans in all branches of the economy , also in non-financing branches of the manufacturing economy . Large companies in particular offer their employees employer loans, while small and medium-sized companies offer them less. Employees in the trial period , with fixed-term contracts or trainees are mostly excluded from employer loans .

Banking Employer Loans

In the banking sector itself, the professional competence as a lender for employer loans is highest because credit institutions operate the lending business as a banking business. In order to make it more difficult to grant credit to bank employees, section 15 of the KWG provides, within the framework of the so-called organ credit , that loans to directors , executives , authorized signatories and supervisory boards of the institute can only be granted with a unanimous decision by all directors of the institute and with the express consent of the supervisory body at market conditions may be granted. Customary market conditions apply if the arm's length principle is met. This regulation is not applicable to the other bank employees within the framework of employee programs, nor do market conditions have to be met here.

Legal issues

Employer loans are granted on the basis of a loan agreement concluded between employer and employee . The employer loan is not a payment on wages, but is a loan, the dedication and repayment of which is due to the fact that the employee is employed by the employer.

The loan agreement is already concluded in writing for reasons of preserving evidence . It is a loan agreement in accordance with Section 488 BGB , which obliges the employer to provide the employee with an amount of money in the agreed amount. The employee is required to pay the owed interest payable and due date to repay his employer the provided loans. According to Section 491 (2) No. 4 BGB, an employer loan is not a consumer loan contract , provided the agreed interest rate is below the market rate. Nevertheless, the employees enjoy the status of a consumer within the meaning of § 13 BGB. As a rule, the loan agreement contains more favorable loan terms than the consumer loans or overdraft facilities of the credit institutions, in particular with regard to the loan interest or repayment . If employer loans are even granted interest-free and repayment-free, they are considered repaid after a specified number of further years of service of the employee. Since the employer is not allowed to give the employee any goods on credit in accordance with Section 107 (2) GewO , a corresponding restriction of the intended use is not permitted. Often an assignment of wages and salaries is agreed as security for the loan , which secures the repayment by deducting the income from work. A repayment clause ensures that the employer loan becomes due immediately upon termination of the employment relationship. If the clause is missing, the employee's departure from the company does not constitute a reason for extraordinary termination of the employer loan.

A corporation may in accordance with § 89 para. 1 AktG their board members , chief clerk and to the entire business operations authorized officers credit only pursuant to a decision of the Supervisory Board grant. Pursuant to Section 115 AktG, this also applies to members of the Supervisory Board. Since employer loans are a company wage structure within the meaning of Section 87 (1) No. 10 BetrVG , their granting is subject to co-determination by the works council .

The employer loans do not include advances by the employer to his employees, such as wage or salary advances , if this only deviates from the payment terms of the employment contract , or travel expense advances . The payment of unearned wages represents an advance payment. The labor courts are responsible for legal disputes arising from employer loans in accordance with Section 2 (1) No. 4a ArbGG .

Tax issues

With the employer, the interest income from employer loans is part of the operating income . Any refinancing costs are business expenses . The employee the difference between the part of market interest and the employee to be paid interest as a cash benefit principle for taxable pay ( § 8 para. 2 Income Tax Act ). The employee receives a taxable interest rate advantage through the employer loan if the employer loan is not granted at a market interest rate (benchmark interest rate). The benchmark interest rate is the lending rate shown by the Bundesbank in the monthly published MFI interest rate statistics . The BMF letter of October 1, 2008 requires that the market interest rate (so-called benchmark interest rate ) be used as a comparison to the interest rate paid ( effective interest rate ). The average interest rates published by the Bundesbank when the loan was taken out are decisive ( MFI interest rate statistics ); these are to be set at 96 percent. The interest benefits are considered as benefits in kind , which are taxable if the sum of the remaining employer loans is higher than 2,600 euros per employee. If the employee does not receive other benefits in kind, the pecuniary benefit remains tax-free if the monthly exemption limit of 44 euros in accordance with Section 8 (2) last sentence of the EStG is not exceeded. For employer loans that credit institutions grant their employees, special calculation rules apply according to § 8 Paragraph 3 EStG. In addition, it should be noted that a loan from the employer can be viewed as an advantage relevant to income tax. As a result, the loan received must be taxed at the tax office.

Employee loan as an employee equity participation

The concept of employee loan is in the literature mostly a form of employee share ownership used, the employee acts as lender towards his employer. This is a type of employee participation .

Others

The term personal loan, sometimes used instead of the employer loan, is a technical term from banking, where it has a completely different meaning.

Individual evidence

  1. ↑ Friederike Göbbels, employment contracts in text modules , 2006, p. 159
  2. ^ Rabe von Pappenheim (ed.), Lexikon Arbeitsrecht , 2017, p. 20
  3. ↑ Otto Palandt / Walter Weidenkaff, BGB Commentary , 73rd edition, 2014, § 491 Rn. 16
  4. ^ BAG, judgment of 23 September 1992, 5 AZR 569/91
  5. ^ Rabe von Pappenheim (ed.), Lexikon Arbeitsrecht , 2017, p. 21
  6. ↑ BMF letter of May 19, 2015, Az .: IV C 5 -S 2334/07/0009, BStBl. I 2015, 484
  7. ^ BAG, judgment of February 11, 1987, Az .: 4 AZR 144/86
  8. ↑ BFH, judgment of May 4, 2006, Az .: VI R28 / 08, BStBl. II, 781
  9. ↑ BMF letter of October 1, 2008, Az .: IV C 5 - S 2334/07/0009, BStBl. I 2008, 892
  10. ↑ Jürgen Plenker, Tax Handbook for the Pay Office 2017 , 2017, p. 245 f.
  11. ↑ Taxation of the credit. Retrieved May 12, 2019 .
  12. ↑ Hans-J. Schneider / Stefan Fritz / Ernst Zander, Employee participation in profit and equity , 2007, p. 158