Inflation adjustment premium expires: Last chance until the end of 2024

The inflation compensation bonus offers employers the opportunity to support their employees with a special payment of up to EUR 3,000 that is exempt from tax and social security contributions. The aim of this measure is to cushion the impact of increased inflation.

This regulation only valid until December 31, 2024. After that, payment is no longer possible.

Inflation adjustment premium: conditions and deadline

In order for the bonus to remain tax-free, it must be paid in addition to the regular salary. It cannot be offset against already agreed salary components or financed via deferred compensation. Employers can pay the bonus in one lump sum or in several installments as long as the upper limit of 3,000 euros is not exceeded.

It is crucial that the bonus is actually paid out to employees by December 31, 2024 at the latest. A payment with the salary for December 2024, which is not transferred until January 2025, no longer falls under the tax and duty exemption.

As the inflation adjustment bonus is a voluntary benefit provided by the employer, employees are not legally entitled to it. Nevertheless, this option offers an attractive way to reduce the financial burden on the workforce and benefit from tax advantages at the same time.

Act by 31.12.2024!

Employers should use the time remaining until the end of 2024 to plan and implement the payment of the inflation adjustment bonus. This opportunity to do good tax-free will soon expire - it pays to act now!