Employee bonus since 01.01.2024

In comparison to previous years, the employee bonus must be granted in full on the basis of a salary-setting regulation. It is therefore subject to stricter formal requirements than the cost-of-living bonus. The employee bonus gives employers the opportunity to grant up to € 3,000 per employee free of wage tax. The exemption from wage tax includes wage tax, social insurance, contributions to the company pension scheme, employer's contribution, employer's surcharge and municipal tax.
       

Allowances and bonus payments of up to € 3,000 per year tax- and contribution-free

The allowances and bonus payments for employees, which are additionally paid in the calendar year 2024 due to inflation, are tax and contribution-free up to € 3,000 per year if the payment is made on the basis of collective agreements or company agreements concluded on the basis of a collective agreement authorization. If no works council can be formed because the company has too few employees, the payment can be made on the basis of a contractual agreement between the employers for all employees. This is the new formal requirement of the wage-setting regulation. Companies that belong to an employers' association, such as the Chamber of Commerce, can only pay the employee bonus free of wage tax if this is provided for in the collective agreement for 2024.

In addition, the employee bonus must be an additional payment. This must not have been granted to employees previously. This must be seen against the background that the employee bonus is intended to compensate for increased expenses due to the inflation wave. There must therefore also be no conversion of benefits. However, cost-of-living bonuses granted to date from the calendar years 2022 and 2023 are harmless.

"As a result, this means that a tax-free employee bonus 2024 can only be paid for all employment relationships that fall within the scope of a collective agreement (according to the WKO, approx. 98%) if this results directly or indirectly from the collective agreement. Employers are therefore dependent on the results of the corresponding collective agreement negotiations in terms of time and amount, which unfortunately considerably limits the scope for action compared to the cost-of-living bonus."

Birgit Würth, Partner at Forvis Mazars

Please note: If both a profit share and an employee bonus are paid out in calendar year 2024, these are only tax-free if they do not exceed a total of € 3,000 per year. If you are therefore planning to grant additional benefits, we recommend that you seek comprehensive advice.