Inflation Compensation Bonus: Review and Conclusion
The Inflation Compensation Bonus (Inflationsausgleichsprämie, IAP) was one of the biggest tax relief measures in recent years: Employers could pay their employees up to 3,000 euros tax-free and social security-free between October 26, 2022 and December 31, 2024. This deadline has now expired definitively.
How the Bonus Worked
The legal basis was Section 3 No. 11c EStG. Employers could pay the bonus in one sum or in installments - up to a maximum of 3,000 euros per employment relationship. The key requirement: The payment had to be in addition to the already owed salary.
Net Comparison: Inflation Bonus vs. Regular Bonus
| Gross Bonus | Net (as tax-free IAP) | Net (regular bonus, approx.) | Difference |
|---|---|---|---|
| 1,000 € | 1,000 € | approx. 590 € | +410 € |
| 2,000 € | 2,000 € | approx. 1,140 € | +860 € |
| 3,000 € | 3,000 € | approx. 1,650 € | +1,350 € |
What Comes After the Inflation Bonus? Alternatives 2025/2026
Since January 1, 2025, there is no direct successor to the IAP. Employers can use:
- Benefits in kind (50 euros/month): Vouchers or in-kind benefits up to 50 euros monthly remain tax-free. That's 600 euros per year.
- Recreation allowance: Up to 156 euros for the employee, 104 euros for spouse and 52 euros per child.
- Health promotion (600 euros/year): Subsidies for certified prevention courses remain tax-free.
- Jobticket / Deutschlandticket: Public transport subsidies are tax-free when granted in addition to salary.
- Company pension: Employer contributions to bAV are social security-free up to 4% of the contribution ceiling.
Sources: Section 3 No. 11c EStG, BMF guidance dated 07.12.2022, Federal Ministry of Finance FAQ
Net check: Check what remains from regular one-time payments or salary adjustments: Go to Salary Calculator.