Relief bonus rejected by the Federal Council

The Federal Council has rejected the tax relief bonus criticized by the skilled trades sector. It will not be implemented for the time being. The plan was to allow companies to pay their employees a tax-free bonus of up to €1.000.

The tax relief bonus for employees, passed by the Bundestag with the Tax Advisory Act, will not come into effect initially. The Bundesrat rejected the amendment to the law. The plan was for employers to be allowed to pay their employees a tax-free bonus of up to €1.000 until June 30, 2027 – in addition to their regular wages. The federal government intended this measure to offset some of the sharp rise in fuel and energy prices for consumers due to the war in the Middle East. The federal government and the Bundestag could now call for mediation.

Several representatives of the skilled trades criticized the measure. The German Confederation of Skilled Crafts and Trades (ZDH) criticized the one-sided distribution of responsibility to the detriment of employers. The fact that the relief for citizens is to be provided through a tax- and contribution-free bonus represents an additional challenge for many businesses in the current economic climate, one that they can hardly meet.

Criticism from the trades

The bonus raises expectations among employees that many companies cannot meet given the difficult economic situation. "Hardly any small or medium-sized metalworking company can currently finance additional wage costs due to the economic situation and the already high cost structures in Germany," said Willi Seiger, President of the German Metalworkers' Association . He added that the special payments are appropriate and important if they are financed by the promised savings in the federal budget.

The plumbing, heating, and air conditioning (PHVAC) industry reacted somewhat more strongly. They argued that the relief bonus was not a genuine relief measure, but rather a shift of state responsibility onto businesses. "What's being sold here as quick aid means in practice: the state makes promises – and the business owners are expected to pay," explained Michael Hilpert, President of the German Association for Plumbing, Heating, and Air Conditioning (ZVSHK) . "Anyone who believes that businesses can pay their employees additional bonuses of this magnitude in the short term is completely out of touch with the economic realities of the trades."

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Businesses under pressure

The planned tax- and contribution-free relief bonus is misguided, according to the Central Association of German Electrical and Information Technology Trades (ZVEH). Politicians promise relief but fail to finance it themselves. Instead, they are putting businesses under pressure. "The proposed relief bonus is not a viable concept. Especially in the electrical trades, which are predominantly comprised of small and medium-sized enterprises, such a crisis bonus reaches its clear economic limits," explains ZVEH President Stefan Ehinger.

Regarding the Federal Council's recent decision, ZDH President Jörg Dittrich stated: "By refusing to approve the so-called relief premium, the Federal Council corrected a serious error and prevented the governing coalition from using purported relief measures at the expense of businesses and companies. It was unacceptable to ask precisely those businesses and companies, already suffering from high costs, uncertain conditions, and increasing economic pressure, to foot the bill during a prolonged energy price crisis."

Getting Germany back on a growth path

The federal states were right to halt this development. Dittrich demands: "Now, relief measures must finally be adopted that provide breathing room for both businesses and employees and put the country back on a growth trajectory. This includes, above all, a reform of the income tax system that also focuses on partnerships and sole proprietorships, instead of engaging in further debates about tax burdens. The skilled trades cannot shoulder a one-sided subsidy reduction initiative that only burdens our sector."

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