Tax-free allowances for on-call duty

The tax exemption of bonuses for on-call duty is based on the regular salary and not on the remuneration for on-call duty.

The employer can pay tax-free allowances for on-call duty and standby duty for work on Sundays, public holidays or at night. The extent to which these allowances for on-call duty outside regular working hours are tax-free depends on the pay for regular working hours and not on the pay for on-call duty.

With this decision, the Federal Fiscal Court has changed its case law, which previously made tax exemption dependent on remuneration during on-call duty. However, because the law does not require any specific onerous activity during the working hours for which tax-free allowances are paid and the only criterion for the amount of tax exemption is the basic wage, the judges saw no reason to uphold the restrictive case law.

Accordingly, the prerequisite for the tax exemption of bonuses is that they are granted in addition to the basic wage. Whether additional remuneration is paid for on-call duty or whether it is already covered by the basic wage makes no difference to tax exemption.