Slovak Legislation Updates – Effective January 1, 2025
Starting January 1, 2025, Slovak legislation introduces significant updates to employee benefits. Alongside changes to recreation allowances, a new employer obligation has been introduced: contributions toward children’s sports activities. While these updates provide employees with additional benefits, they also increase administrative tasks for employers. This includes adjusting internal guidelines, managing new data processing requirements, and handling the associated paperwork. How can HR teams implement these changes efficiently while minimizing the administrative burden?
Change to recreation allowances
Since 2019, employers with over 49 employees have been required to offer recreation allowances. Employees who have been with the company for at least 24 continuous months are entitled to 55% of eligible recreation expenses, up to a maximum of €275 per calendar year. For employers with 49 or fewer employees, this allowance remains optional. For employees, these allowances are exempt from income tax, meaning they receive the full amount as net income.
The key change starting in 2025 is that recreation allowances will become transferable. Employees can allocate this benefit to their parents (biological, adoptive, or surrogate). Employers will need to verify the relationship between the employee and the parent. However, the law does not specify how this verification should occur. Most companies are opting to use affidavits. because more thorough investigation would require the submission of the birth certificate and the parents’ identity documents, and here we would need to consider the GDPR regulations.
New allowance for children’s sports activities
From January 1, 2025, employers must provide employees with a contribution for their children’s sports activities. The allowance covers 55% of eligible expenses, up to €275 annually for all children combined, provided the employee has been with the company for at least 24 months. Previously, this contribution was optional and seldom implemented. Now, employers must ensure compliance with this mandatory benefit. To qualify for tax exemption, the payment must be supported by documentation issued by an authorized sports organization registered in the Sports Information System. Employers must also verify that the child has been affiliated with the organization for at least six months.
The law does not restrict this benefit to one parent. Both parents could theoretically claim the allowance for the same child, though only for different periods of the child’s sports activities, as clarified by Financial Administration guidelines. This ambiguity requires careful attention from employers during implementation.
Managing Increased Administrative Requirements
Along with the financial costs of these allowances, employers face additional responsibilities in data processing. For example, providing allowances for children’s sports activities will involve processing personal data of employees’ minor children, necessitating updates to internal documents and compliance measures.
Simona Klučiarová, a legal expert at Accace, highlights, “Employers must add the new purpose of processing personal data related to these allowances to their internal policies.”
Simplifying the process with TULIP
Managing these new benefits might seem like a daunting administrative challenge, but solutions exist. At TULIP, we’ve developed an automated system to streamline these processes, reducing the workload for HR departments.
How TULIP’s Benefits Module Works:
- Employee-Friendly Interface: Employees fill out a simple form with the required information.
- Automated Calculations: The system automatically calculates the contribution amount and tracks the remaining balance.
- Legal Compliance: TULIP ensures adherence to the latest legislation.
- Notifications: HR teams and employees receive email alerts regarding requests and their status.
- Error Reduction: Automation minimizes mistakes caused by manual handling.
- Centralized Management: Employees can manage their benefits independently, freeing HR from unnecessary tasks.
TULIP’s platform doesn’t just handle recreation and sports contributions—it can be customized for any company benefit, such as language courses, Multisport cards, or anniversary bonuses. The intuitive interface allows employers to:
- Plan and manage various benefit types.
- Set specific conditions and availability.
- Track claims and application statuses.
- Provide employees with a comprehensive view of all their benefits in one place.
With TULIP, you can digitize and automate your benefits management, reducing administrative burdens while ensuring compliance with the latest regulations. To learn more, check our Benefits page. To request a demo, or get a price proposal, contact us today.
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