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V0679-24 15 April 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · retribución en especie

Employer-paid health insurance: exempt benefit in kind or cash income depending on its origin

A query was raised regarding whether health insurance paid by an employer, with the amount deducted from the employee's salary, constitutes an exempt benefit in kind. The DGT clarifies that it depends on whether the company acts as the policyholder due to a contractual obligation or if it is merely mediating the payment of cash income.

The question raised

Consideration of salary in kind and the possible application of the exemption provided in Article 42.3.c) of the Personal Income Tax Law.

The DGT's ruling

For medical insurance to constitute an exempt benefit in kind, the company must be the policyholder and have agreed upon said provision in the contract or collective agreement. If the company only acts as a payment intermediary so that the employee may use part of their cash salary, it is considered cash income. In the case of payment intermediation, the exemption provided in Article 42.3.c) of the Personal Income Tax Law does not apply.

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