Gym subsidies will be taxed as employment income for Personal Income Tax (IRPF)

The tax treatment of economic benefits granted by companies to their employees to cover physical well-being expenses has been delimited by the tax administration. Not all subsidies of this type receive the same treatment under Personal Income Tax (IRPF).

What the DGT has ruled

The Dirección General de Tributos (DGT) has determined that economic subsidies received by workers are, as a general rule, employment income subject to IRPF regulations. The criteria establish a clear distinction between two types of benefits:

• Health subsidies: Benefits intended for the treatment or restoration of health are exempt, provided they refer to illness expenses not covered by the corresponding Health Service or Mutual Fund.
• Well-being or gym subsidies: Benefits intended to compensate for gym expenses or those seeking to alleviate the recipient's economic situation constitute taxable income.

What it means for you

If you are a worker receiving a subsidy or economic aid from your company to attend the gym or perform physical well-being activities, this amount will count as income in your tax return. It is not considered a healthcare exemption, but rather employment income that increases your taxable base.

For companies, this criterion implies the obligation to apply the corresponding withholdings in employees' payroll for those subsidies that do not strictly comply with the healthcare and health treatment requirements defined in the IRPF Law.

What you should do

It is necessary to distinguish the nature of the benefit received. If the subsidy is intended for the treatment of an illness not covered by social security, it could be exempt. If the objective is purely preventive, for well-being, or for the compensation of gym expenses, it must be included in the worker's taxable base. It is recommended to assess the nature of each subsidy concept to ensure the correct treatment of payroll withholdings and the correct declaration of income.