The federal government plans to provide significantly greater relief to employees through the relief bonus than was originally anticipated. The black-red coalition aims to extend the relief bonus, which was initially set for this year, until June 30, 2027. According to “Handelsblatt” citing insider sources, Federal Finance Minister Lars Klingbeil (SPD) estimates that this extension will result in a relief volume of 2.8 billion euros. This figure stems from a resolution draft by the governing party factions, which is scheduled for a vote in the German Bundestag on Wednesday.
This revised plan involves considerably higher costs compared to the initial agreement. The increased expenditure is attributed to the fact that the longer the measure can be utilized, the more likely companies are to use the option. Previously, the Union and SPD had agreed on the relief bonus during the Coalition Committee meeting on April 12. This measure was designed to allow employers to voluntarily pay their employees a tax- and contribution-free relief bonus of 1,000 euros in 2026. Companies would be able to deduct the resulting costs as operating expenses for tax purposes. To counteract the projected shortfall in tax revenue, the federal government intends to raise the excise tax on tobacco starting in 2026, an increase that was originally scheduled for a later date.
Following the Coalition Committee’s decision, there was significant backlash, particularly from employers, who argued that they would have to bear the costs-a burden many could not afford given the economic crisis-and that the timeframe for the bonus was too short. In response, Chancellor Friedrich Merz (CDU) stated last week that the bonus was merely an offer, suggesting that it might only be paid out partially, or perhaps even into 2027. The Union and SPD have now finalized an agreement based on this premise.