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Inflation Compensation Premium – who is granted it?

2022-10-28T16:52:24.639Z


Inflation Compensation Premium: Who is it granted to? Created: 10/28/2022, 6:38 p.m By: Wolfgang Mulke Companies can pay employees up to 3,000 euros as an inflation compensation premium. A legal claim does not arise from the regulation. Frankfurt – Employers can now pay their employees up to 3,000 euros as tax-free inflation compensation. The regulation is only an appeal to the companies. Many


Inflation Compensation Premium: Who is it granted to?

Created: 10/28/2022, 6:38 p.m

By: Wolfgang Mulke

Companies can pay employees up to 3,000 euros as an inflation compensation premium.

A legal claim does not arise from the regulation.

Frankfurt – Employers can now pay their employees up to 3,000 euros as tax-free inflation compensation.

The regulation is only an appeal to the companies.

Many companies will probably not be able to afford the special payment.

The FR answers the most important questions.

What is the inflation premium?

The bonus payment initiated by the federal government is actually called the “inflation compensation premium”.

Between October 26 of this year and December 31, 2024, employers can pay them to their employees.

The maximum is 3000 euros for each.

No taxes or social security contributions have to be paid for the premium.

This is what the federal government's third relief package envisages.

The initiative goes back to the concerted action in which employers, trade unions and the federal government discussed ways of cushioning price increases in the summer without promoting a wage-price spiral through high wage agreements.

Who gets the one-time payment?

The only thing that is clear is that the regulation enables payment for all employees.

Whether it is granted depends on each individual company, as it is a voluntary benefit.

This means that it can also be much lower or not granted at all.

With large companies that are still doing good business, the probability of a high payment is higher than with a small craft business that is just making ends meet due to the high energy prices and can no longer afford the special payment.

Many employees could make good use of the bonus.

© Imago

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Do I have to take care of the payment myself?

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Payment is the responsibility of the employer.

It only needs to be made clear on the payslip that the bonus is paid in addition to the regular salary.

It is also not allowed to replace special payments such as Christmas or holiday bonuses, but is paid as an additional payment.

Is the payment one time?

It doesn't have to be like this.

The 3000 euros are only set as a tax and duty-free maximum amount.

Companies can also pay out the grant in several installments up to this total amount.

Of course, companies are also allowed to pay higher inflation premiums to their workers.

But then the part of the payment that exceeds 3000 euros is subject to tax and duties.

Does the bonus replace regular salary negotiations?

In fact, the idea stems from the search for a way to ensure that employees are compensated for inflation without the companies being burdened with permanently higher costs due to very high wage demands in regular collective bargaining and without having to pass this on through their prices - so one Start the wage-price spiral.

The trade unions deal with this request differently.

The chemical industry has just agreed a collective agreement that provides for two bonus payments of 1,500 euros each and two increases in the table wages.

The metallers, on the other hand, do not want the two elements to be linked, just as little as the trade unions in the public sector.

Inflation compensation premium: Does the payment replace wage increases under collective bargaining law?

Does the bonus also exist in the public sector?

Legally it is possible, but in practice it is still unclear.

There has not yet been a commitment from the employer.

The topic will probably play a role in the forthcoming collective bargaining for the public sector at the federal and local levels.

The unions expect that employers will offer a bonus instead of a spreadsheet wage increase.

This would only increase the wages of the employees once, but not in the long term.

Verdi and the civil servants' association don't want to get involved in that.

Do mini-jobbers benefit from the regulation?

The same applies here: This is a voluntary payment.

Minor employees can also receive them if their company wants to pay them.

How much does the premium cost the taxpayer?

The tax office receives less due to the tax exemption of the premium.

The federal government puts this loss at around 1.2 billion euros.

However, it can become much more expensive for the state if the federal, state and local governments pay their employees the premium.

With around five million employees in the authorities and departments, up to 15 billion euros would then come together.

(Wolfgang Mulke)

Meanwhile, the German trade union federation is demanding further support in the face of rising gas prices.

Source: merkur

All news articles on 2022-10-28

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