The German Bundestag approved on Friday legislation granting companies the authority to provide employees with a tax-free and contribution-exempt relief bonus of €1,000. The coalition factions voted in favor, while the AfD and Left Party opposed the measure, and the Greens abstained. Companies will have until June 30, 2027 to distribute the payment. The legislation still requires final approval from the Bundesrat, scheduled for its next regular session on May 8.
The payment deadline is extended to mid-2027 following widespread criticism from employers who indicated they lack immediate financial capacity to distribute the bonus. Many businesses cited ongoing economic uncertainties and operational pressures as barriers to making payments within a shorter timeframe.
According to government estimates outlined in the draft legislation, implementing the relief premium through 2027 will result in tax revenue losses totaling €2.8 billion for the state. Of this amount, €1.1 billion will impact federal coffers, with the remaining revenue shortfall affecting state and municipal budgets.
A survey conducted by the German Retail Association (HDE) involving 436 companies revealed that 83 percent of respondents view such relief measures as governmental responsibility rather than employer obligations. HDE President Alexander von Preen stated: "It cannot be that the state promises citizens relief and then asks companies to pay this on top of normal wages from their budgets."
The German Employers' Association (BDA) anticipates significantly reduced participation compared to a similar one-time payment initiative in 2022. BDA Managing Director Steffen Kampeter told Bild newspaper: "It will be significantly fewer." He cited recent collective bargaining outcomes, noting that industries such as chemicals agreed just a few weeks ago to forgo wage adjustments for the current year, making additional bonus payments unlikely.
Kampeter directed sharp criticism toward Federal Chancellor Friedrich Merz (CDU) and Finance Minister Lars Klingbeil (SPD), stating both leaders "raised expectations and dumped the fulfillment of these expectations on others. You don't do that, that's not proper."
"The situation many industrial companies are currently facing doesn't seem to have registered with the governing parties yet," declared the German Engineering Federation (VDMA) after the vote. Relief for citizens "must not be passed solely on to companies."
The AfD characterized the measure as ineffective and accused the government of profiting from crisis-related price increases through higher tax revenues. Member of Parliament Kay Gottschalk stated: "The biggest beneficiary of this price crisis sits there on the government bench. You are taking more than half at the pump." The AfD submitted its own motion proposing to increase the commuter allowance to 50 cents per kilometer for workers who drive to work, positioning it as a more direct relief mechanism.
Greens parliamentary group leader Katharina Dröge dismissed the revival of fuel tax discount measures previously implemented by the traffic light coalition, calling it "a hare-brained idea." She warned that oil companies would exploit such measures as another opportunity to "rip off" consumers. The Greens demanded a windfall profits tax to skim off excess profits made by oil companies during the crisis. Dröge called on the government to pay money directly to citizens who need support through a payment mechanism, rather than implementing the fuel tax discount.
The German Employers' Association (BDA) expects that significantly fewer companies will pay out the planned tax-free relief bonus of €1,000 to employees than a similar one-time payment in 2022. "It will be significantly fewer," BDA Managing Director Steffen Kampeter told Bild newspaper. He emphasized a key distinction from the 2022 initiative: employers and trade unions were not consulted during the current decision-making process.
Thuringia's Minister-President Mario Voigt (CDU) told RTL and ntv broadcasters on Friday morning that the €1,000 bonus "reflects a reality, especially for small and medium-sized businesses and tradespeople in Thuringia, that is simply unaffordable." According to Voigt, the bonus will not be paid to state public sector employees.
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