Child sports allowance

What it means

The children’s sports allowance is an employee benefit through which the employer reimburses an employee’s documented costs for their child’s regular sporting activity, such as club membership or training fees. The sports provider must be an organisation entered in the register of legal entities in sport.

Up to a statutory annual limit per child, the allowance is exempt from income tax for the employee and is not included in the assessment base for contributions. For the employer it is a tax-deductible expense. That distinguishes it from an ordinary bonus, which would attract both tax and contributions.

Unlike the recreation allowance, this benefit is voluntary. The employer decides whether to offer it and should set conditions, such as a minimum length of employment, in an internal policy so that all employees are treated equally.

How it works in practice

For clients wishing to introduce the benefit, we set up a simple process: the employee applies and attaches an invoice or proof of payment from the sports organisation, and payroll checks that the organisation is in the register and the annual limit has not been exceeded.

The allowance is paid with salary and shown on the payslip as an exempt item. If a child does several sports, the limit applies per child, not per activity. If both parents claim for the same child with different employers, care is needed that the limit is not used twice.

The benefit can also be included in a cafeteria benefits scheme, from which employees choose according to their needs. For a parent whose children play in a sports club, it may be more attractive than other benefits of the same value because more ends up in their pocket.

What to watch out for

A common mistake is reimbursing an organisation not entered in the sports register, such as a private coach without sports organisation status. The exemption then does not apply, and tax and contributions must be deducted from the allowance.

Any amount above the annual limit is taxed as ordinary income. If the employer pays more, payroll must split the amount correctly into exempt and taxable parts, or an error will appear in the monthly report and the annual reconciliation.