Tax-free Corona special bonus up to EUR 1,500
Especially in times of Corona, many employees are very challenged and often do almost superhuman things to ensure that everything goes well and the system is kept running. A certain degree of appreciation from society, but also from the employer, is good.
Government decision of these bonus payments
The government recently thought the same thing and considered making this appreciation easier for employees in the form of financial bonuses from a tax point of view. It therefore decided in April of this year that an employer can grant its employees tax-free allowances or benefits in kind. Up to a maximum value of EUR 1,500 in the form of a Corona special bonus.
Since this is specifically a service related to work in the Corona crisis, the period from 1.3. until December 31, 2020.
The specifics of these bonus payments
The special feature of this special bonus is that the bonus payments are not taxable. The payments are not limited to specific industries. This means that not only “systemically relevant” employees can benefit from it, but everyone. Even mini-jobbers can take advantage of such bonuses. The benefits of a bonus payment to hard-working employees need only be mentioned briefly – the appreciation shown increases employee satisfaction. For employers, this means that satisfied employees work more motivated, more productively and usually stay longer with the company. To name just a few of the benefits from which both sides can benefit.
What should be considered with the special bonus?
The legal basis for the bonus is § 3 number 11 in the EStG. The only requirement that must be met is that this type of bonus must be paid in addition to normal wages. That means, also in addition to the contractually agreed Christmas and vacation pay and not instead. Because these are still taxed in return for the Corona premium. In addition, the special payment cannot be paid to employees as wages for overtime worked.
Importantly, the granting of such a payment must be recorded in the employee’s payroll account. It should be clearly stated that this tax-free bonus was granted in the form of a corona bonus.
Conclusion on the new Corona special bonus
The government has thought about something with the Corona special bonus in order to be able to reward hard-working employees (regardless of whether they are systemically relevant or not) and to make this attractive to employers. The result is the possibility of a tax-free bonus payment of up to 1,500 euros, which employers can grant to their employees. This regulation was for the period from 1.3. to 21.12.2020 and is therefore clearly intended for the Corona crisis.
It should be noted that this bonus must be paid out in addition to the wages owed, i.e. also in addition to the holiday and Christmas bonuses. In addition, the wage record must clearly show that such a bonus has been granted. In addition to being tax-free, the bonus has the advantage that it is not limited to a specific industry – even mini-jobbers can claim it.
With this, a small thank you can be expressed and even shown to all employees who work hard during the crisis, who contribute every day to keeping the system and the economy running. Because many of them deserve more than mere applause.