During the Corona crisis and as part of the current relief packages, the legislator has given employers the possibility to financially support their employees through bonus payments. As these bonuses are tax-free, they do not have to be declared in the tax return.
Corona bonus and care bonus
With 2020, the first year of the pandemic, the so-called Corona-Prämie was made possible. It allowed employers to pay their employees a one-off tax-free bonus payment of up to 1,500 euros. Social security contributions were also not due. The payment could be made as a total sum or in several instalments. This special payment was possible until 31 March 2022.
An additional bonus, the so-called Pflege-Bonus, was introduced for caregivers to financially recognise their extraordinary commitment during the Corona pandemic. This tax-free bonus of up to 4,500 euros can still be paid by the employer until 31 May 2023 under certain circumstances.
As both bonuses are tax-free, they do not have to be declared in the income tax return.
Under the impact of rising prices in 2022, the inflation bonus (Inflationsausgleichsprämie) was introduced. Since 26 October 2022 and until 31 December 2024, employers can make a one-off tax-free payment of up to 3,000 euros to their employees. This payment can be made as a total sum or in several instalments.
The inflation bonus, being tax-free, also does not have to be declared in the tax return.
We do not provide tax advice. We do not replace a certified tax advisor. All information without guarantee.