3. Personnel costs

The following concepts can be included in this category, which appear clearly differentiated in the IRPF declaration.

a. Wages and salaries

Amounts accrued by third parties under an employment relationship must be included. These include salaries, extra payments, remuneration in kind (including any corresponding payment on account, provided that it has not been passed on to the recipients), as well as prizes.

Specialties in the IRPF of work benefits between members of the same family unit

Regulations: Art. 30.2.2 Law Income Tax

The following are considered deductible expenses: remuneration paid to other members of the holder's family unit, provided that all of the following requirements are met:

That the spouse or minor children work regularly and continuously in the business or professional activities carried out by the holder of the same.
That the spouse or minor child of the owner of the activity live with the latter.
That there is an appropriate employment contract, of any of the modalities established in the Workers' Statute and other development provisions.
That the spouse or minor child is registered with the corresponding Social Security regime.
That the remuneration stipulated with each of them, corresponding to their professional qualifications and the work performed, is not higher than market rates. If they are higher, the excess over the market value will not be a deductible expense for the payer.
The stipulated remunerations are considered work income for their recipients for all tax purposes.

b. Employers’ social security

The amounts paid to Social Security for social contributions by the company based on the salaries and wages of its staff will be included.

c. Compensation

This includes amounts given to company personnel to compensate them for damage or loss, even if they are exempt for the recipient. Specifically included in this section are severance pay and early retirement benefits.

d. Diets and travel allowances for employed personnel

This will include amounts paid by the company to cover or offset the costs of food and lodging in restaurants, hotels and other hospitality establishments, as well as the travel expenses incurred by its employees when travelling to municipalities other than their usual place of work (even if they are exempt from personal income tax for the recipient).

e. Contributions to social security systems established for the benefit of workers

• Contributions to pension plans or company social security plans

In accordance with the provisions of article 14.2 of the LIS , contributions or contributions made by the employer or professional as promoter of a pension plan regulated in the consolidated text of the Law on the Regulation of Pension Plans and Funds, as well as those made to company social security plans in which their employees are participants or insured, will be deductible, provided that they are attributed to each participant or insured in the corresponding part, except in the case of contributions made in favor of beneficiaries on an extraordinary basis when necessary to guarantee current benefits or the rights of participants in plans that include defined benefit schemes for retirement and it has been revealed, through actuarial reviews, the existence of a deficit in the pension plan.

Since 1 January 2013, collective dependency insurance has been accepted as an insurance contract suitable for implementing pension commitments assumed by companies.

See in this regard the first Additional Provision of the consolidated text of the Law on the Regulation of Pension Plans and Funds in the wording given by Law 27/2011, of August 1 ( BOE of 2).

• Contributions made to cover contingencies similar to those of pension plans

In accordance with the provisions of article 14.2 of the LIS , business contributions made to cover contingencies similar to those of pension plans will be deductible, provided they meet the following requirements:

Charged for tax purposes to the persons to whom the benefits are linked.
That the payer irrevocably transfers the right to receive future benefits.
That the payer transfers ownership and management of the resources that comprise said contributions.

Likewise, the contributions made by the promoting companies provided for in Directive (EU) 2016/2341 of the European Parliament and of the Council, of December 14, 2016 , relating to the activities and the supervision of employment pension funds (FPE), provided that the requirements listed above are met and the contingencies covered are those provided for pension plans in their regulatory regulations.

Note: Please note that Directive (EU) 2016/2341 of the European Parliament and of the Council of December 14, 2016, repealed Directive 2003/41/ EC to which Article 51 of the Personal Income Tax Law refers, with effect from January 13, 2019, establishing that the references to the aforementioned Directive 2003/41/EC They will be understood to be made to the aforementioned Directive ( EU) 2016/2341.

Finally, in relation to contributions to social security systems established for the benefit of workers, it should be noted that, in accordance with the provisions of article 14.1 of the LIS, expenses for provisions and internal funds for the coverage of contingencies identical or similar to those that are the subject of the Revised Text of the Law Regulating Pension Plans and Funds, approved by Royal Legislative Decree 1/2002, of November 29, will not be deductible. These expenses will be tax deductible in the tax period in which the benefits are paid.

f. Other personnel expenses

This heading may include staff training expenses, both regular and sporadic, premiums for life, accident, illness insurance contracts, etc., except for Social Security contributions and any other expenses related to the staff in the service of the activity that cannot be considered as pure generosity.

Expenses incurred in accordance with customs and practices with respect to company personnel (gifts, Christmas baskets, etc.) are not considered pure generosity and may therefore constitute deductible expenses.