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The South Korean branch of video game publisher Nexon made headlines online when it gave out a small bonus to its employees in the form of lootboxes. A monthly bonus coupon was given in August 2020 to employees. The employees would type a keyword in a chatbot to activate the coupon, which would add a random amount between 2000 and 100000 points to one's balance.

Is giving out bonuses as lootboxes or any other way that relies on pure luck rather than my achievements in work legal in other jurisdictions? Would the legality be different if it were salaries and not bonuses that were given out this way?

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    Interesting question. In the UK these would be regarded as a taxable Benefit in Kind, but their variable and indeterminate value on receipt - and therfore what tax, if any, is due - would pose quite a conundrum for HMRC +1.
    – user35069
    Aug 8, 2023 at 16:10
  • @Rick The ticket might be worth 1 cent
    – Trish
    Aug 8, 2023 at 17:15
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    To be clear, is it giving a random amount to the employee's bank balance, or to their (non-redeemable into currency) video game account?
    – nick012000
    Aug 8, 2023 at 21:15

2 Answers 2

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Is it legal for companies to pay salaries or bonuses as lootboxes?

The German "Gewerbeordnung" says:

§ 107 Berechnung und Zahlung des Arbeitsentgelts

  • Das Arbeitsentgelt ist in Euro zu berechnen und auszuzahlen.
  • Arbeitgeber und Arbeitnehmer können Sachbezüge als Teil des Arbeitsentgelts vereinbaren, wenn dies dem Interesse des Arbeitnehmers oder der Eigenart des Arbeitsverhältnisses entspricht. Der Arbeitgeber darf dem Arbeitnehmer keine Waren auf Kredit überlassen. Er darf ihm nach Vereinbarung Waren in Anrechnung auf das Arbeitsentgelt überlassen, wenn die Anrechnung zu den durchschnittlichen Selbstkosten erfolgt. Die geleisteten Gegenstände müssen mittlerer Art und Güte sein, soweit nicht ausdrücklich eine andere Vereinbarung getroffen worden ist. Der Wert der vereinbarten Sachbezüge oder die Anrechnung der überlassenen Waren auf das Arbeitsentgelt darf die Höhe des pfändbaren Teils des Arbeitsentgelts nicht übersteigen.
  • Die Zahlung eines regelmäßigen Arbeitsentgelts kann nicht für die Fälle ausgeschlossen werden, in denen der Arbeitnehmer für seine Tätigkeit von Dritten ein Trinkgeld erhält. Trinkgeld ist ein Geldbetrag, den ein Dritter ohne rechtliche Verpflichtung dem Arbeitnehmer zusätzlich zu einer dem Arbeitgeber geschuldeten Leistung zahlt.

Source

Translation:

§ 107 Calculation and payment of remuneration

  • Remuneration shall be calculated and paid in euros.
  • Employer and employee may agree on benefits in kind as part of the remuneration if this is in the interest of the employee or in accordance with the nature of the employment relationship. The employer may not provide the employee with goods on credit. The employer may, by agreement, provide the employee with goods as a credit against the employee's remuneration, provided that the goods are provided at the average cost price. The goods provided must be of average type and quality unless expressly agreed otherwise. The value of the agreed benefits in kind or the crediting of the goods provided against the remuneration may not exceed the amount of the attachable part of the remuneration.
  • The payment of regular remuneration may not be excluded in cases where the employee receives a tip from a third party for his work. A tip is an amount of money paid by a third party to the employee without a legal obligation in addition to a service owed to the employer.

What does that mean?

The base Salary can never be paid in anything but Euros.

Makes sense, how would you determine whether 2 apples, an egg and a parttime timeshare of a camel each month are above or below the minimum wage? How would the employee pay their own costs from that, even it it were worth more? Taxes would be a nightmare. Good luck to the Ex-Wife and kid, getting half an apple and a stinky camel timeshare for a day as alimony. No, money is there for a reason.

Benefits like bonuses or additional agreements on top of your basic salary can be goods of other kinds. Loot boxes for example. Please note that the employee has to explicitely agree on that. I will assume getting an additional lootbox on top for free is something an employee can agree on without a second thought. Getting parts of your salary normally paid in Euros or bonus normally paid in Euros as Lootboxes would be something the employee would have to explicitely agree to, otherwise it must be Euros. You cannot "force" an employee to accept anything but Euros.

Note the sentence that the employer can give the employee goods instead of Euros not for their made up "sale" price, but for the cost of making them. So for no profit. You could pay someone partially in loot boxes, but since a loot box costs about 0,01€ to make (electricity, database maintenance, the developer who has to press the button once a month), that would be a lot of loot boxes to pay a part of the salary.

And yes, even "goods" will be taxed. They are part of your income. So if you get a "lootbox", be preprared to pay taxes on that. If you don't play the game, paying taxes on something you don't use might not be worth it after all.

It is well known that companies have employee-only pricing schemes. For example you will find that employees of automobile manufacturers will drive their brands cars, because getting a good price on a car is a big deal. Some companies allow private use of company cars for the employees that work "in the field". But it is very rare that employees get actual goods monthly as part of their salary in Germany.

But there is no mention of "luck" anywhere in the law. Assuming the employee knows about the "luck" factor and explicitely agrees to have that as part of their remuneration, then everything is fine.

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  • The last sentence in the second bullet point about attachable earnings means that even if employer and employee agree at least half of the salary needs to be paid in Euros. Not sure whether 'attachable earnings' is a well known expression in English but the German word 'pfändbar' makes clear that this is the part paid in Euros.
    – quarague
    Aug 9, 2023 at 7:34
  • Yes, the English translation seems a bit wonky, but I don't know the English legal vocabulary to improve it. If anyone does, feel free to go in and do it.
    – nvoigt
    Aug 9, 2023 at 7:36
  • In the UK an "attachment of earnings" is deduction from one's pay / salary made under a court order to enforce e.g. debt recovery. Is this similar to pfändbar?
    – user35069
    Aug 9, 2023 at 9:30
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    @Rick, wow, yes, that translator was better than I gave it credit for, that is exactly what it means. I guess I just didn't understand that it was correct.
    – nvoigt
    Aug 9, 2023 at 9:48
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A bonus of this sort is a perfectly legal trivial Benefit in Kind (BIK) as long as it meets all the tax-exemption requirements at section 323A, Income Tax (Earnings and Pensions) Act 2003, which I have summarised as being:

  • It is niether cash nor a cash voucher

  • The (average) cost of providing the benefit is not more that £50:00 (NB this is the cost to the employer, not necessarily the value of the loot box)

  • Is not given under contract or in lieu of salary etc

  • Is not given as recognition of particular services carried out as part of the recipient's employment

  • (There are further provisions when it is given to a company director or office-holder, or their family, which do not seem to apply here.)

Unless these conditions are all satisfied, HMRC would (presumably) treat it as a "cash equivalent of any non-cash voucher" under section 87 of the Act and regulation 4(1)(c), Tax Credits (Definition and Calculation of Income) Regulations 2002.


  • For awareness and clarity:

It is the cost to the employer that matters, not any value the bonus may have in the future.

For example. If, instead of loot boxes, the employer gives each employee lottery tickets / scratch cards worth up to £50:00 as part of a work-place syndicate, this would fall within the above Trivial BIK rules so no tax is due - as long as the other conditions are also met.

And... any winnings using this method belong to the syndicate, not the employer, so no employment-related tax etc is due on them either. Source

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