Definition and legal framework of the deputate
The term deputate in a legal context refers to a benefit in kind or in goods, to which employees, civil servants, or other entitled individuals are entitled as part of their remuneration. Deputates are particularly relevant in labor law, social law, and the public sector. They differ from cash payments in that they are granted in the form of goods, benefits in kind, or services. The legal structure of deputates is comprehensively regulated and is closely linked to employment contracts, collective bargaining regulations, and tax law norms.
Historical development of the deputate system
The deputate system has historical roots, especially in agriculture, industry, mining, and forestry. Originally, deputates served to compensate for low wages, for example, by providing employees with housing, food, or fuel. With industrialization and the development of modern remuneration systems, the original significance of deputates has gradually diminished, but they continue to be used in certain industries and specific contracts.
Types of deputates
Benefit-in-kind deputate
With a benefit-in-kind deputate, the entitled person receives a certain quantity of goods or merchandise as part of their income. Examples include free or discounted foodstuffs, coal (coal deputate), wood (wood deputate), or other natural products.
Service deputate
A service deputate comprises services or usage benefits, such as the provision of free accommodation (housing deputate), work clothing, work materials, or equipment. This form is particularly found among employees of charitable, church, or public institutions.
Monetary replacement for deputates
In modern employment contracts, deputates are sometimes replaced by a monetary equivalent, for example in the form of discounted products or services, which are treated as a benefit in kind.
Legal framework conditions
Labor law regulations
The granting of deputates is based on statutory provisions, collective agreements, or individual agreements in employment contracts. Rights to deputates may be expressly agreed or, in the absence of agreement, regulated via company practice, collective agreements, or special labor laws. If a statutory or collective agreement claim to a deputate ceases, there is generally no individual right to it any longer, unless it is contractually guaranteed.
Contents of a deputate entitlement
A deputate claim includes the type, quantity, and quality of the deputate item, the time and manner of provision, and the modalities regarding vacation, illness, or termination of employment.
Modification of deputates
A change or elimination of deputates requires the consent of the parties involved, unless this is regulated by a new collective agreement or law. If a deputate is unilaterally changed without legal basis, this may give rise to claims for damages.
Tax treatment of deputates
According to the Income Tax Act (EStG), deputates are generally considered a monetary benefit and thus form part of taxable salary. Valuation is based on the usual market price minus any personal contribution made. For certain benefits in kind (e.g. accommodation and meals), there are fixed rates determined annually by the tax authorities. Social security contributions must also be paid for deputates that have been taxed.
Tax exemption for selected deputates
Under certain conditions, deputates can be granted tax-free, for example within the exemption limits for benefits in kind or as employee discounts up to a legally stipulated exemption amount.
Social security law aspects
In social security law as well, deputates are considered earned income and are subject to contributions. If workers receive deputates, this increases the contribution bases for pension, health, nursing care, and unemployment insurance.
Special regulations for certain professional groups
In specific sectors, such as agriculture, forestry, or mining, there are contractual or statutory special regulations for deputates. Notable examples include the coal deputate for miners or the wood deputate for forestry employees. In these cases, specific provisions may apply, such as concerning the amount, type, or tax treatment of the deputate.
End of the deputate entitlement
A deputate entitlement typically ends with the termination of the underlying employment or service relationship, unless special agreements or company arrangements provide for continued granting (e.g. company pension schemes involving deputates). In the event of illness, vacation, or leave of absence, statutory employment law provisions regarding pro-rata granting or waiver of the deputate must be observed.
Deputate in case law
The courts dealing with labor law regularly address questions about the establishment, duration, and cessation of deputate claims. Common points of contention include valuing the monetary benefit, handling old contracts, and issues of offsetting and tax treatment. These decisions have a significant influence on the labor and tax treatment of deputates.
Literature and further regulations
The subject of deputates is regularly addressed in labor and tax law textbooks, commentaries on the Income Tax Act, and labor law journals. For detailed individual questions, the relevant legal provisions, federal collective agreements, and administrative regulations are decisive.
Conclusion
The deputate is an important form of payment in goods or in kind, which is subject to numerous legal regulations. Observance of labor, tax, and social security requirements is essential for both employers and employees, as errors in their structure and implementation can result in legal and financial disadvantages. The importance of deputates has changed over the years but remains a relevant part of remuneration systems in certain industries and situations.
Frequently asked questions
What legal claims to a deputate can employees assert?
Employees generally only have a legal claim to a deputate if this has been expressly agreed in the employment contract, a company agreement, a collective agreement or based on company practice. The legal basis can therefore take various forms: In the employment or collective agreement, the type and scope of the deputate are often precisely regulated, for example with regard to annual quantities or certain tax advantages. If there is no express regulation, a deputate granted over a long period may become legally binding through so-called company practice; this is the case if the employer has repeatedly and voluntarily granted deputates over a longer period, so that the employee could reasonably expect this conduct to continue. However, there is no general statutory right to a deputate. Disputes about rights and obligations regarding a deputate are to be resolved in accordance with the general provisions of labor law.
How is the tax treatment of deputates regulated?
Deputates represent benefits in kind and must therefore generally be taxed as a monetary benefit in accordance with § 8 EStG (Income Tax Act). This means that the value of a received deputate is added to salary and the employee must pay income tax on this amount. For certain sectors – such as energy supply companies (coal deputate, electricity deputate) – exceptions or favorable valuation rules may apply. Since the abolishment of historical special regulations (for example, by the Tax Amendment Act of 1992), the general valuation rules mostly apply. Valuation is done either at the usual retail price at the place of provision or, if this cannot be determined, at the purchase price less customary discounts. For exact determination of the taxable value, individual agreements and tax law exceptions should be considered in each individual case.
Can deputates be unilaterally abolished or reduced by the employer?
A unilateral abolition or reduction of a deputate by the employer is only possible under very strict legal conditions. Where there is a claim arising from contract, collective agreement, or company practice, the granting of deputates is part of the employer’s secondary contractual obligations. Amendments – especially those to the detriment of the employee – generally require a change notice unless a mutual agreement can be reached. Unilateral employer measures without a legal basis may be ineffective and lead to claims for damages. For deputates governed by collective agreements, the protections of collective bargaining autonomy must also be observed; changes may then only be made via new collective bargaining or corresponding amending agreements.
What happens to deputate entitlements when the employment relationship ends?
With the termination of the employment relationship, claims to future deputate grants generally extinguish as well. However, deputates that have already accrued but not yet been paid out or provided can continue to constitute a claim and must be fulfilled by the employer, unless otherwise agreed. In the case of proportionate annual deputates, it must be checked in the individual case whether the employee is entitled to a pro rata deputate for the current year; this depends on the applicable rules in the employment contract, collective agreement, or the relevant company agreements. Special situations can arise with company transfers (§ 613a BGB) or retirement, where continuation clauses or exclusion periods may become relevant.
Does the deputate also apply during parental leave, sickness, or maternity leave?
Whether and to what extent a deputate is granted during periods of leave from work (such as parental leave, illness, or maternity protection) depends primarily on the underlying contractual or collective agreements. Often, the deputate as remuneration in kind is linked to actual work performed, but in many cases it can also be granted independently as a benefit in kind for the duration of the employment relationship. During longer periods of leave, especially parental leave, employers are generally not obliged under § 17 BEEG to continue providing the deputate unless the contract provides for unconditional continuation. In the case of illness, deputates are usually granted for up to six weeks of continued pay, as the remuneration claim continues. For maternity leave, the same rules as for illness generally apply.
Is the deputate subject to garnishment protection?
As the deputate counts as a benefit in kind towards salary, the provisions on garnishment protection (§§ 850 ff. ZPO) apply accordingly. This means: Only if the salary (including the deputate) exceeds certain attachable limits, can the value or, if applicable, a corresponding monetary substitute be garnished. The deputate itself, especially if provided in kind (such as fuel or food), can generally only be garnished if it is easily realisable or converted into cash value. In practice, garnishment is particularly relevant if the deputate represents a significant share of the salary.
Can a deputate be inherited or transferred to third parties?
In principle, deputates are highly personal ancillary benefits to salary and are therefore not transferable or inheritable. Upon the employee’s death, claims to the deputate expire, although deputate benefits already accrued but not yet handed over (e.g. for the current year) may become part of the estate, unless otherwise stipulated. In exceptional cases – especially with housing companies’ deputates (fuel, discounts) – special contracts may provide for transferability to surviving dependents. Such exceptions are rare and require clear contractual provisions.
