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Tax-free bonuses during the Corona crisis: These are the most important requirements
25. Juni 2020
During the Corona crisis, social basic services were maintained in particularly by those employees who could not do their work from home. Therefore, in April the federal government decided to introduce tax-free bonuses for employees. Which payments made by the employer are tax-free and which conditions apply? We will provide the answers.
From March 1 to December 31, 2020, employers may pay tax-free bonuses up to a maximum of EUR 1,500 to their employees. However, employers can effectively and exclusively pay out this bonus for reasons of Corona support and as a financial aid to mitigate the consequences of the crisis.
In principle, these bonuses were intended for professional groups such as supermarket cashiers. However, they were never restricted to certain occupational groups. We provided essential information in a previous article. This measure was announced by the federal government at the beginning of April. Since that time, further questions have arisen during the work with our clients.
Is every bonus payment during the Corona crisis considered tax-free?
In principle, tax-free bonuses are assumed to be justified by a particular reason. This would make every bonus payment up to EUR 1,500 tax-free.
Which conditions have to be met in order to consider the bonus as tax-free?
The tax-free bonus must alleviate the additional burden of the Corona crisis. In order to do so, the employer must pay the tax-free bonus in addition to the salary already owed in the form of an allowance.
Are customary extraordinary payments tax-free during the crisis?
In principle, yes. However, in this case, the existence of a written agreement between employer and employee is mandatory. This agreement must state that these payments are tax-free allowances and financial contributions for the period from 1 March 2020 to 31 December 2020.
We are pleased to assist you with the preparation of such document. Please do not hesitate to contact us at any time if further questions arise.