A payment of 3,000 euros as a tax-exempt special benefit: The "inflation compensation premium" is met with great interest from employers.

In addition to the requirements of tax and social security exemption, employers should also keep an eye on the labor law aspects of the bonus.

The bonus is a voluntary benefit, so it must be paid in addition to the salary that is already owed - this also includes the Christmas bonus or the annual bonus.

Employers are neither obliged to pay such a premium at all, nor do they have to exhaust the tax-free limit of 3000 euros.

You can pay the premium as a lump sum or in any number of installments.

You can also freely choose the time of payment until December 31, 2024 - after that the tax exemption ends.

Who can the award go to?

The bonus can also be part of a solution in collective bargaining disputes or in negotiations with works councils and thus serve as a bargaining chip for employers - provided the corresponding budget has not already been allocated elsewhere.

If a collective agreement or company agreement is then concluded that includes such a bonus, the employees naturally have a legal claim.

This can also arise if the employer makes a commitment or a contractual agreement.

The important thing is that a legal claim does not conflict with tax and social security exemption.

Employers can also only pay out the bonus to certain groups of employees and ignore others, provided they keep an eye on the principle of equal treatment under labor law.

This principle states that in the case of voluntary services, employees may only be treated differently if there is an objective reason for this.

For example, it will be illegal to exclude part-time employees from bonus payments per se.

Conversely, it should be permissible to only pay the bonus to those employees who, from the employer's point of view, are particularly affected by inflation.

Keep an overview when paying in several installments

The purpose of the inflation compensation premium is to alleviate the general consequences of inflation for employees.

In addition, the employer may also pursue other goals with the bonus payment, such as rewarding loyalty to the company or creating incentives for loyalty to the company.

But be careful: If these goals override the original purpose of the bonus, the payment may no longer be made in addition to the wages owed, and tax exemption would be endangered.

The question of whether employees will receive the inflation compensation premium pro rata if they resign between the time the legal entitlement arises and the planned payment date has not been finally clarified.

Much speaks against it.

The bonus is not related to the work performance and therefore has no payment character.

If the employer wants to make a benefit dependent on the existence of an ongoing employment relationship at the payment date, it is better to choose a gratuity.

A corresponding condition would then be permissible without further ado – but of course this would not be exempt from tax or social security contributions.

When paying in several installments, one should also keep in mind that there is no operational practice that could give employees a claim to the bonus.

The premium should also be clearly identified as such in the payslip to avoid any doubts about its purpose and consequently its exemption from tax and social security contributions.

The authors are attorneys at KPMG Law Rechtsanwaltsgesellschaft mbH.