Friday, March 31, 2023

Expect inflation premium: only a few believe in the 3000 euro tax-free from the relief package

The federal government wants to set the course for inflation premiums.

© Fabian Strauch / DPA

Inflation premium can be discussed in consolidated action. But some employees believe that tax-free 3,000 euros exists.

BERLIN – 3000 EUR TAX-FREE: For many workers in Germany who are currently suffering from high inflation and the gas crisis, the federal government has announced a potential inflation premium as part of Relief Package 3 which is a dream. A dream that is far away. Ultimately, it is not the federal government that decides who receives the 3,000 euros as a tax-free inflation bonus. Rather, it is up to the employers. To explore opportunities, Chancellor Olaf Scholz (SPD) is meeting in Berlin with representatives of trade unions and trade unions for a concerted action.

Tax-free inflation premium up to EUR 3000: Relief package brings 3 more help

The joint action at the Chancellor aims to work together to find solutions to address the risks of recession and inflation. Notably, an inflation premium of 3,000 euros is not on the table in the negotiations. But after the traffic light alliance with the third relief package, among other things, energy flat rates for pensioners and bonuses for students and trainees, inflation premiums have become a big topic of conversation in Germany.

Since inflation premiums are tax-free and Social Security-free lump sum payments from companies to their employees, it is up to the employer to decide whether to pay support due to high inflation in Germany. You can also set the height. 3000 Euro is only the limit up to which the payment remains tax-free.

3000 euros tax-free: inflation bonus from third relief package gives hope to employees

Shortly after the results of the third relief package were announced, Scholz referred to a round of talks with unions and employers. At the time, he announced that in such a case, the federal government would be “ready to ask companies to exempt their employees from taxes and Social Security contributions in the amount of up to 3,000 euros in the event of additional payments.”

In this context, the government could create an incentive for companies to pay a maximum tax-free inflation premium of only €3,000. It is clear that this regulation could actually lead to “inflation premium frustration” among employees: given the gas crisis in Germany, many companies have run into financial difficulties and some will not be able to pay inflation premiums to their employees. .

Germany gas crisis: workers expect inflation premium of 3,000 euros from relief package

It is likely that, given the energy crisis in Germany, many companies will not pay a tax-free inflation premium of up to €3,000. For many employers, it is about economic survival in the present. It is expected that negotiations on a possible lump-sum payment will be agreed between the individual collective bargaining parties. It now remains to be seen to what extent the inflation premium will be for employers – and whether Olaf Scholz can keep his promise not to leave citizens alone in the gas crisis.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
Latest news
Related news