During the coronavirus pandemic and in response to inflation, the German government allowed employers to pay tax-free bonuses to their employees. We’ll explain which bonuses were or are possible, how long they are valid – and why you don’t need to report them in your tax return.
📌 Quick & Easy
- The corona bonus (up to €1,500) was tax-free until March 31, 2022 – no longer available.
- The care bonus (up to €4,500) was tax-free until May 31, 2023 – no longer available.
- The inflation bonus (up to €3,000) was tax-free until December 31, 2024 – no longer available.
- All listed bonuses are tax-free and do not need to be included in your tax return.
🚀 Your Guide
- Corona bonus and care bonus
- Inflation bonus – still available
- Do I need to include tax-free bonuses in my tax return?
Corona Bonus and Care Bonus
In the first year of the pandemic (2020), the corona bonus was introduced. Employers were allowed to pay their employees up to €1,500 tax-free and exempt from social contributions, either as a lump sum or in installments. This option ended on March 31, 2022.
A separate care bonus was introduced for healthcare and nursing staff to recognize their exceptional work during the pandemic. Employers could pay up to €4,500 tax-free under certain conditions. This ended on May 31, 2023.
Both bonuses were fully tax-exempt – they were not subject to income tax or social contributions. Therefore, they do not need to be included in your tax return.
Inflation Bonus
To help offset inflation, a new tax-free bonus was introduced: the inflation compensation bonus.
- Available since: October 26, 2022
- Valid until: December 31, 2024
- Amount: up to €3,000 tax- and contribution-free
- Payment: either as a lump sum or in installments
⚠️ The inflation bonus is voluntary – employers are not required to pay it. It must be paid in addition to your regular salary.
This bonus is also completely tax-free and does not need to be declared in your tax return.
Do I Need to Include Tax-Free Bonuses in My Tax Return?
No. The corona bonus, care bonus, and inflation bonus are tax-exempt and therefore do not need to be included in your income tax return.
💡 You don’t need to enter them or submit any proof – even if you received the payment in installments.
📌 Good to Know:
If your employer pays you one of these bonuses, it should appear separately from your regular wages on your payslip – usually marked as “tax-free” or “§3 No. 11c EStG” (for the inflation bonus).
⚠️ We do not provide tax advice and do not replace a certified tax advisor. All information has been compiled to the best of our knowledge but is provided without guarantee.
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