Up to 3000 Euros in bonus to be granted tax tax free to employees as inflation compensation

[scook17 225]

German finance ministry released this press release 28.09:

https://www.bundesfinanzministerium.de/Content/DE/Pressemitteilungen/Finanzpolitik/2022/09/2022-09-28-bundeskabinett-bringt-inflationsausgleichspraemie-auf-den-weg.html

 

"Further relief: Federal cabinet initiates inflation compensation premium
number  23
The Federal Cabinet today passed a drafting aid to the coalition factions, with which the inflation compensation premium ("benefits to mitigate inflation") agreed by the coalition committee can be implemented. Employers should be able to grant such a bonus to their employees tax-free up to an amount of 3,000 euros . This is a tax exempt amount. The prerequisite for tax exemption is that the benefit is granted in addition to the salary that is already owed.

 

“The rising prices are a burden on people and companies. As the federal government, we have to act quickly here. With the tax-free inflation compensation premium, we give employers and employees an unbureaucratic option. The bonus should be granted tax-free until December 31, 2024. The German economy needs flexibility to overcome the crisis. What is possible in tax law must also be possible elsewhere.” Federal Finance Minister Christian Lindner 

 

No special requirements are placed on the connection between performance and price increase. It is sufficient if the employer makes it clear in any form (e.g. by making a corresponding note on the transfer slip as part of the pay slip) that this is related to the price increase when granting the benefit.

An amendment to the Unemployment Benefit II / Social Security Ordinance ensures that this inflation compensation premium is not taken into account as income for recipients of benefits under SGB II , in order to understand the tax privileges in SGB II as well."

 

I wonder how many companies will actually provide a bonus? They did a similar thing with E-Bikes and The 1500 Euro Covid bonus. I heard that many companies never gave out such bonuses, even though the government allowed such incentives.

 

Anyone know when this will come into force, or if it's still to become law yet?

 

[fraufruit 41,602]

What about the people who need it most? Retirees on fixed incomes.

[RenegadeFurther 2,392]

Yes, this law is really going to help inflation.

 

The patients are really running the asylum.