Tax Return: Getting a Bonus? This is How Award Winners Can Also Save on Taxes
Some bosses pay their employees bonuses for good performance. Depending on when and how the bonus is paid out, the tax decreases - or is waived entirely.
In Germany, bonus payments are subject to taxes and social security contributions, unless they are paid for specific purposes such as company pension plans or childcare fees. The tax on bonus payments is calculated as if the payment was made proportionally throughout the year, to prevent a sudden increase in tax burden. For 2025, the contribution assessment limit for pension insurance is 101,400 euros and for health insurance is 69,750 euros per year.
If a bonus is paid in the new year, it can be tax-free up to a certain amount, such as 252 euros more in 2026, due to the increased tax-free allowance of 12,348 euros. Certain benefits, like job tickets, meal allowances, and health courses, are tax-free up to a certain limit.
Written by urgent.news from Handelsblatt's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
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