By Erik Lacko, Firm: Nitschneider
From 1 January 2020, employers can make a voluntary contribution towards sports vouchers for employees’ children in Slovakia. This article analyses how significant this change really is.
In contrast to holiday vouchers, sports vouchers are not yet mandatory.
The Slovak Parliament has adopted an amendment to the Labour Code introducing a voluntary contribution for employers to cover part of the employee's expenses for their children’s regular sports activities. This amendment comes into force on 1 January 2020. The purpose is to increase the number of children and young people playing sports on a regular basis.
The approved legislation also creates a new instrument for financing sports activities from private sources, from employers. However, instruments for financing sports activities already exist.
Sports vouchers were approved in the Sports Act. The reason for the adoption of the amendment to the Labour Code is the fact, that the state budget does not have sufficient funds to support sports. The state is therefore looking for alternative forms of financing from the employers’ pockets.
The amendment might also partially burden the state budget, as the voluntary contribution also applies to public sector employers, i.e. the state and entities connected to the state budget.
Due to the voluntary nature of this contribution, the amendment does not solve the long-term problem with the sports financing in Slovakia. The only advantage of sports vouchers is their exemption from taxes and levies and the possibility for employers (including self-employed individuals) to include them in tax expenses. At the same time, the contribution limits have been set at a very low level. This amendment foresees employee expenditure on sports activities for children up to the amount of EUR 500 per year (of which the employer pays 55 %, i.e. EUR 275 and the employee pays 45 %, i.e. EUR 225).
The real costs to parents of their children’s sports activities are much higher than just something over EUR 40 per month, often double, especially in larger cities, not to mention families with more children. This limit is not justified in any way since this contribution is not financed from the state budget and it is only up to the employers how much they will contribute to the employee.