The framework conditions for the tax-free employee bonus 2025 have now been specified in the draft Budget Accompanying Act. The measure is part of the current government programme and aims to provide companies with targeted incentives to motivate employees - while at the same time complying with certain tax requirements.
Up to EUR 1,000 tax-free
Employers can pay out up to EUR 1,000 tax-free as an employee bonus in the 2025 calendar year. This payment can be differentiated according to group or individual criteria - provided that the differentiation is company-related and objectively justified. The tax benefits are based on the regulations for start-up employee participation in accordance with Section 67a EStG.
There is currently no legislative proposal for a parallel exemption in social security and in the area of non-wage labour costs (DB, DZ, KommSt). Whether the legislator will „follow suit“ with a retroactive exemption regulation in these areas - as was once the case with corona or inflation premiums - therefore remains open for the time being.
Prerequisites
It is important that the bonus represents an additional benefit that is not granted on a regular or customary basis. Bonus payments based on existing performance agreements, regularly recurring bonuses or extraordinary salary increases are therefore not tax-free. Previous tax-free special payments such as corona bonuses (2020/2021), inflation bonuses (2022/2023) or the 2024 employee bonus are not considered regular and do not prevent the new bonus from being tax-free.
Exceeding the maximum limit
If an employee receives more than EUR 1,000 tax-free in the calendar year 2025 - for example through several employment relationships - an income tax assessment obligation arises in accordance with § 41 para. 1 EStG. The total exemption limit of EUR 3,000 per year must also be observed if profit sharing is granted at the same time in accordance with Section 3 para. 1 no. 35 EStG. If this amount is exceeded, the excess amount must be taxed subsequently.
Evaluation and further procedure
The effectiveness of the tax-free employee bonus will be evaluated by the Federal Ministry of Finance by April 2026. Based on the results and the actual budgetary impact, a legislative proposal for a possible extension or adjustment of the bonus scheme for 2026 is to be drawn up by the end of May 2026. A budget totalling EUR 250 million is available for both years (2025/26).
Status: 02/06/2025
Source: BMF
Photo: Pexels - Olly
