The wonderful Christmas time is also the time the employee would like to be rewarded by receiving a Christmas present. Not all presents are a reward, but they are a gift provided by the employer. The rule is that everything the employee receives due to the employment is subject to wage tax, so what about the Christmas present?
Wage tax is due and depends on the height of the income, what percentage is due. For presents up to EUR 70 the wage tax percentage is 20%. Presents with a value between EUR 70 and EUR 136 the wage tax percentage is 58,7% and 108,3% over the amount exceeding EUR 70. When the amount exceeds EUR 136, the full amount is taxed at the maximum rate of 58,7% and 108,3%.
When you check what tax rates we have, you will notice that these 58,7% and 108,3% are not among the rates, but the amounts are grossed up resulting in these high percentages.
Is this the value of the Christmas present subject to wage tax including or excluding VAT? That is a separate question. When you spend more on gifts, trips (pleasure) and other presents than EUR 227 per year per employee, then you cannot deduct any of the VAT. If you spend less, then you can. That implies you have to make a calculation at the end of the year per employee.