Dramatically rising energy costs and the urgent need to reduce consumption in the context of the climate crisis mean many organisations are keen to incentivise employees to save energy. Can energy saving measures be included as criteria in employee incentive plans?
Can employers include KPIs relating to energy savings in their incentive plans?
Are there tax and social security deductions or other benefits in place to incentivise reductions in energy/travel costs and carbon emissions?
| Country | Yes/No | Brief comments |
|---|---|---|
| Argentina |  |
No special measures are in place regarding the reduction of these costs. |
| Austria |  |
The Austrian government is allowing employers to pay their employees a 'cost-of-living bonus' of up to EUR 3,000 for the calendar years 2022 and 2023, for which no tax or social security contributions have to be paid. In addition, the Austrian government has paid out a one-time 'climate and inflation bonus' in the amount of EUR 500 for adults and EUR 250 for children under the age of 18 in September/October 2022 to those who have had their primary residence in Austria since 1 January 2022. |
| Belgium | |
Under Belgian corporate tax rules, some energy-saving investments are subject to reduced taxation. In order to reduce carbon emissions, starting from July 2023 the Belgian tax authorities will penalize new company cars that are not carbon-free. There are other measures to foster greener worker mobility habits through electric vehicles or other means of transport, but these are also being impacted by the price crisis. |
| Bulgaria | |
There are no specific measures. |
| Colombia | |
There are not specific measures. |
| Croatia | |
Such measures include, for example, certain motor vehicle tax relief that is available when purchasing company cars based on the amount of carbon dioxide emissions. |
| Denmark | |
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| Estonia | |
There are no laws, regulations or guidelines in Estonia that require or recommend checking the standards of the health and safety measures adopted by companies involved in the supply chain. In the building sector specifically, there is a regulation which states that at a joint construction site, the main contractor is responsible for ensuring that the construction work does not endanger individuals working on the site or in the vicinity of the site, including the employees of subcontractors. However, this only applies if the employees are working at the same construction site. |
| France | |
There are no specific schemes linked to energy cost reductions, but collective incentive plans which can include such KPIs benefit from social security exemptions. |
| Germany | |
The German government made a one-off payment of up to EUR 300 in September 2022 to mitigate the impact of increased energy prices for consumers, and it also announced a new relief package which contains the following one-off proposals: " Electricity price brake for basic consumption. " One-time payment for gas and district heating customers (probably in December 2022). " One-time payment of EUR 300 to pensioners and EUR 200 to students. " Sales tax on total gas consumption to be reduced to 7% by the end of March 2024. " The planned increase in the CO2 price will be postponed by one year to January 2024. In addition, employers can motivate their employees to save energy themselves by creating financial or other incentives. |
| Greece | |
There are no specific measures. If an incentive for reduction of energy costs is included in a bonus, the bonus will still be subject to social security contributions but will be taxed favorably at a rate of 20% (instead of the general 22%-45% tax rate on salary income). |
| Hong Kong | |
There have not been such measures implemented in Hong Kong so far. |
| Hungary | |
There are no such specific measures |
| India | |
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| Italy | |
There are no specific measures from an employment standpoint. However, a flat tax rate of 10% (instead of the standard personal income tax rates, which varies from 23% to 43%) and a reduction of social security contributions is provided, under certain conditions, for performance-bonuses related, among other things, to measurable increases in quality, efficiency and innovation. This can include KPIs linked to energy savings. |
| Kazakhstan | |
Kazakhstan law does not provide for any special tax regime or additional tax/social security benefits to employers or employees for stimulating a reduction in electricity costs or carbon emissions. As for business trips, the legislation sets a limit for some of the compensation for business trips that are exempt from individual income tax. |
| Luxembourg | |
In September 2022, the Luxembourg government and the trade unions and employers' organizations signed an agreement that provides additional aid to promote the transition to renewable energy and energy renovation, a cost-of-living allowance, and an energy bonus for low-income households. The government also plans to modernize the tax subsidy for investments in energy and ecological transition projects and a new energy aid for small and medium-sized enterprises. This follows a previous agreement signed in March 2022 which provided other measures for companies and households. |
| Mexico | |
There are no specific measures in Mexico. |
| Netherlands | |
There are no specific measures in this regard which are directly related to the employment relationship. However, the government is implementing some measures to help with higher energy costs. For employees with a low income, a one-time energy allowance is available in the amount of approximately EUR 1,300. Moreover, for energy-intensive small and medium enterprises, the government is initiating a measure under which companies whose energy costs are at least 12.5% of revenue can obtain compensation up to a maximum amount of EUR 160,000. |
| Poland | |
There are no such measures. |
| Romania | |
From an employment and tax standpoint, there are currently no specific measures to incentivize reduction of energy costs, travel costs and/or carbon emissions. The employer may decide on its own initiative to put in place internal incentive programs that are applicable to its own employees. |
| Serbia | |
There is one measure adopted by Serbian government which incentivizes all individuals/households to reduce energy consumption by reducing their electricity bills up to 30%. Even though this measure does not deal directly with the employment relationship, it can influence the expectations of employees to be reimbursed by employers for energy costs if they are not eligible for governmental incentives to work from home. |
| Slovakia | |
Currently, no specific measures directed at or relating to employers or employees have been adopted for such purposes. However, there are multiple potential measures that are being debated by the government. |
| Switzerland | |
To date, no such measures are in place in Switzerland. |
| UK | |
It is possible however to provide employees with the use of bicycles to enable them to cycle to work and the use of ultra low emission vehicles in a relatively tax efficient manner. |
| Ukraine | |
Multiple factors relating to the Russian military invasion have highlighted the need to reduce the consumption of energy and energy costs. For this purpose, the government has implemented a wide range of regulatory changes. However, so far no special measures have been taken specifically with regard to employers and personnel. |
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
