The German Federal Ministry of Finance announced that employers may make special payments to employees in the current calendar year free of tax and social security contributions. According to the Minister of Finance, this will give employers the opportunity to financially reward the commitment of their employees in the current Corona crisis.

The reuirements are that the special payment

  • does not exceed an amount of 1,500.00 euros,
  • that employees will receive the payment in the period from March 1 to December 31, 2020, and
  • that this payment will be in addition to their normal remuneration.

This privilege is not limited to so-called “system-relevant professions”. All employees can benefit from this tax- and social security-free special payment. It can also be a cash or non-cash benefit. However, holiday and Christmas bonuses are not covered by the exception, provided that a contractual or collectively agreed entitlement to them exists anyway.



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