In order to compensate for the burdens on consumers due to inflation and rising energy and raw material prices, the federal government has now introduced a law: Employers will then be able to pay the so-called Inflation compensation premium now distribute tax-free.
Is the inflation compensation premium obligatory? No. The employer is not obliged to pay the bonus.
If this inflation compensation premium is paid, does the employer have to make these payments to all employees equally in the same amount? It really depends on the individual case. Although the employer is free to pay the inflation compensation premium and distribute it to the employees from a tax point of view, there may be deviating regulations in the collective agreement or deviating practices in labour law. Accordingly, certain employees may not be arbitrarily favoured or others disadvantaged. If the bonus is not paid to all employees or is assessed at different levels, there must be objective reasons, otherwise the principle of equal treatment under labour law applies.
The federal government has set up the so-called "Third relief package" was adopted. Part of this aid programme is also the possible granting of a Inflation compensation premium.
What does this mean for employers?
The premium is paid either via Grants or via Remuneration in kind. Allowances are direct payments that are paid independently of wages. Benefits in kind are other benefits that employers grant (for example). The premium does not have to be paid in a single payment, but can be divided over the period of validity of the law, i.e. until 31.12.2024, i.e. accordingly in Partial services take place.
It is important that companies designate the bonus as such. This can be noted on the bank statement, for example.
With the inflation compensation premium, employers can grant their employees tax and contribution exemptions of up to € 3,000.00 from 26.10.2022. This payment can be made until 31 December 2024. Employers have flexibility in payment during this period.
Payments do not have to be made in one sum, but can be paid in instalments. It is important that the premiums are not paid instead of wages (e.g. bonuses), but in addition to the wages owed anyway. Therefore, we recommend making this payment clear to the employees and the purpose of the payment: internal. This could be done by a corresponding note on the remittance slip, bsw:
"Inflation compensation premium-This payment is made voluntarily without recognition of a legal obligation. It does not constitute a legal claim for the future.
Or by separate letter using the following
Sample wording:
Name, address of the employee
Date
Special payment to mitigate the additional burden of increased consumer prices
Very Dear ladies and Gentlemen...
Rising global energy and commodity prices are a extreme challenge.
- One-off payment: To support you during these times, you will receive a Special payment invoice in the form of an inflation compensation premium according to § 3 No. 11c EStG in the amount of € XXX with the payroll month XXX.
Or
b) Multiple payments:
In order to support you during these times, you will receive a special payment in the form of an inflation compensation premium according to § 3 No. 11c EStG in the amount of XXX € with each of the payroll months XXX, i.e. a total of XXX €.
Or
c)Donation in kind: To support you during these times, you will receive with this letter a goods voucher in the form of a Inflation compensation premium According to § 3 No.11c EStG Value XXXEuro. The Payment of the Voucher value is excluded.
d) Remuneration in kind: Discounted work clothes, vouchers for fuel, free meals, etc.
and
All payments/multiple payments/vouchers/remuneration in kind are voluntary and are made without recognition of any legal obligation.
The employee has noinen Entitlement to further future co-payments, even if these are paid in instalments.
With kind regards
Signature Employer____
(Employee confirms acknowledgement with Signature) :
Signature Employee____
___________ .____________
Who can receive the premium?
The inflation premium can Basically every employee receive. This applies regardless of the number of hours worked per week and the type of employment (e.g. as a student or mini-jobber). The employer is free to decide how and whether the bonus is paid. Accordingly, there is no right to any premium distributions. However, if provisions to this effect were included in the collective agreement, a legal claim could be established.
Unequal treatment possible
There may be inequities in the distribution of premiums. In this respect, the general labour law Principle of equal treatment. There must be legitimate reasons for treating workers differently and, for example, only granting the inflation premium to some specific workers.
If you have any questions about the inflation compensation premium, call us and arrange a consultation appointment. We will be happy to help you.
Package of federal measures to secure an affordable energy supply and strengthen incomes of 3 September 2022
The package of measures launched by the traffic light coalition includes numerous subsidies and relief for consumers and businesses. Here is an overview of some of the measures:
- Electricity price brakeAfter the revenue cap, an electricity price brake for basic consumption is introduced from its revenue. Private households can thus be credited with a certain amount of electricity at a reduced price (basic consumption). The same applies to small and medium-sized enterprises with utility tariffs.
- Postponement the increase of the CO2 price: The planned increase of the CO2 price by five euros per tonne is postponed. The increase was originally to come into force on 1 January 2023 and will now come into force on 1 January 2024. This also postpones the previously planned subsequent steps in 2024 and 2025 by one year accordingly.
- One-off payment for pensioners: from December 2022 in the amount of 300 euros gross
- One-off payment for students:
After the heating allowance for BäföG recipients, all students as well as specialised students are to receive a one-time payment of 200 euros.
- Increase in child benefitFrom 1 January 2023, child benefit for the first, second and third child will be increased by 18 euros per month. The increase is valid until the end of 2024.
- One-off payment for studentsStudents and trainees receive a one-off payment of 200 euros.
- Higher housing benefit: On 1 January 2023, the group of persons entitled to housing benefit is to be increased and the housing benefit will be increased (by a permanent climate component and a permanent heating cost component).
- Citizen's IncomeUnemployment benefit II and social benefit will be replaced by the modern citizen's income on 1 January 2023.
- Raising the mini-job limit: Low-income workers will be relieved via social security contributions. The ceiling will be raised to 2,000 euros per month as of 1.01.2023.
- Short-time allowance: The period during which short-time allowance can be granted is extended.
- 49 Euro ticket: It is valid nationwide for long-distance transport.
- Value added tax in gastronomy: The seven per cent reduction in sales tax for food and beverages in the catering industry continues to apply.
- Abolition of double taxation of pensions:
Taxpayers are to be able to fully deduct their pension contributions from 1 January 2023. (This is two years earlier than originally planned).
- Home office dayFor each home office day, a deduction of five euros is allowed for income tax purposes up to a maximum of 600 euros per year.
Here is the coalition's resolution to read: extension://elhekieabhbkpmcefcoobjddigjcaadp/https://www.bundesfinanzministerium.de/Content/DE/Downloads/Schlaglichter/Entlastungen/ergebnispapier-des-koalitionsausschusses.pdf?__blob=publicationFile&v=4)
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