Update: Tax-Free Crisis Bonus of €1,000 in Germany

With the planned introduction of a tax-free relief payment for employees, the legislator is creating a new option to provide financial support to employees. The measure is designed as a voluntary instrument for employers and is intended to mitigate the effects of rising living, energy and mobility costs.

Below, we address the key questions regarding the planned structure and practical application of the measure.

Purpose of the measure

The new relief bonus is intended to provide short-term financial support to employees. At the same time, companies are given the opportunity to grant additional payments in a flexible and straightforward manner.

The focus is on targeted support for employees, without any legal obligation to make such payments.

Tax treatment

In future, employers may grant special payments of up to €1,000 per employee free of wage tax and social security contributions.
This is subject to the condition that the payment:

• is granted in addition to the salary already owed,
• is not financed through salary conversion,
• does not replace or reduce any existing remuneration.

The tax exemption applies exclusively to payments made within the statutory period provided for by law.

Energy bonus and applicable time frame

The tax exemption under Section 3 No. 11d of the German Income Tax Act (EStG) is intended to apply to employer benefits granted after the law enters into force and until 31 December 2026.
According to the legislator, energy prices are expected to stabilise in the medium term, which is why the measure has deliberately been designed as a temporary provision.

Important note on the legislative process:
The German Bundestag passed the law on 24 April 2026. However, before it can enter into force, approval by the Bundesrat and publication in the Federal Law Gazette are still required.
Payments made before the law enters into force do not fall under the tax exemption and are therefore subject to regular tax and social security contributions.

Who can receive the bonus?

As a rule, the provision applies to all employees within the meaning of German tax law. This includes, among others:

• full-time and part-time employees,
• marginal part-time employees and short-term employees,
• trainees and interns,
• employees on parental leave, short-time work or in comparable situations,
• other groups of employees, provided a tax-recognised employment relationship exists.

The commencement or duration of the employment relationship is not decisive for the tax exemption.

Possible forms of implementation

The relief bonus may be structured flexibly, for example as:

• a one-off payment,
• several instalments,
• a combination of cash and benefits in kind.

A distribution over several months is also possible, provided that the total amount of €1,000 is not exceeded.

Tax and social security effect

The tax-free relief bonus:

• is exempt from wage tax and social security contributions,
• is not offset against social benefits,
• benefits employees in full.

For employers, it generally constitutes a deductible business expense.

Documentation and record-keeping

The benefits granted must be documented in the payroll records. This serves, in particular, to ensure traceability in the context of payroll tax audits.
Based on the current status, a separate declaration in the employee’s income tax return is not required.

Key practical requirements
The tax exemption strictly requires that:

• the benefit is granted in addition to the regular salary,
• no salary conversion is involved,
• no offsetting against future salary increases takes place,
• the payment is clearly identified as an additional benefit.

Assessment and outlook

In practice, the relief bonus is likely to gain importance quickly, as it offers companies a simple way to provide targeted support to employees. At the same time, it can be expected that the tax authorities will issue further clarifying administrative guidance in due course, particularly with regard to the distinction in special cases.

Companies should therefore examine the implementation carefully in order to ensure compliance with the conditions for the tax exemption.

Source
Draft law of the German Bundestag: https://dserver.bundestag.de/btd/21/055/2105529.pdf