Tax-free bonus payments for employees in the Corona crisis

Employers can give their employees up to 1,500 euros tax-free as a bonus payment or in kind on the occasion of the Corona crisis.

At the end of March, in an interview with Bild am Sonntag, German Finance Minister Olaf Scholz announced the possibility of tax-free bonus payments to employees as a result of the Corona crisis. In April, the Federal Ministry of Finance then published an official regulation after consultation with the federal states. According to this, employers can pay their employees allowances and benefits of up to 1,500 euros tax-free or grant them as benefits in kind.

Special benefits are covered by the preferential treatment between March 1, 2020 and December 31, 2020, provided that the benefits are in addition to the wages owed anyway (see the article "Conditions for tax-free fringe benefits") and are recorded in the payroll account. The allowances and benefits are also exempt from social security contributions.

Supplements to short-time allowance paid by the employer are not covered by this tax exemption. Subsidies paid by the employer as compensation for short-time allowance due to exceeding the income threshold are also not covered by the tax exemption. However, other tax exemptions, valuation allowances or flat-rate taxation options remain unaffected by the new regulation and can be claimed in addition to it.