For the first time since the introduction of the euro, inflation in the euro area is rising to over 10%. The Federal Government has responded and developed a way of relieving the burden on employers.
Unfortunately, hardly anyone is currently spared from price increases. In October, inflation in the euro area reached a new high and consumer prices rose by 10.7%.
Germany is doing even worse in comparison and has a price increase of 11.6% to record. Double-digit inflation rates were last measured in Germany over seventy years ago.
In order to cushion the effects of the crisis for companies and consumers, the Federal Government responded and adopted the third relief package on September 3.
Part of this is also the Inflation compensation premium, which has already caused a lot of attention and is intended to relieve employers and employees alike.
What is behind the bonus, who does it actually relieve and what is there to consider when making a payout? We'll explain!
Inflation compensation premium: The basics
What
Employers can give their employees Grants or support up to one Amount of total 3,000 euros Pay it out or give it as a payment in kind (e.g. in the form of vouchers) - and that Tax and social security free! The premium is a voluntary special payment, there is no claim on the part of employees.
When?
The beneficiary period It is limited in time, the payout must be made between October 26, 2022 and the December 31, 2024 lie down.
How?
The payout can be made in several tranches or as a one-time payment. The inflation compensation premium must ancillary be paid at the salary owed anyway and it must be made clear that the premium for Mitigating the additional burden of inflation and in Linked to price increases stands. Diesen Evidence and recording requirements can companies, for example, by means of a corresponding note on the transfer form in the payslip or by concluding an additional agreement. In addition, the tax-free premium must be recorded in the payroll account.
Inflation compensation premium: Important notes
Even in connection with the inflation compensation premium, employment law is always Principle of equal treatment to take into account. According to this, individual workers must not be placed worse off than others for no reason. If a company therefore decides to pay out the premium, fairness is required and all employees must be involved. In particular, there are also workers here in parttime as well as Mini-jobber to take into account. However, it is generally possible to pay out different amounts, provided that factual and comprehensible reasons are available.
You have one works council in the company? Don't forget to include this, as he will discuss the modalities and distribution of the premium Participation rights has.
Good to know: If there are several employment contracts (with different employers), the tax-free premium can be paid separately for each employment relationship.
Inflation compensation premium: background
At first glance, the inflation premium appears to be a gift for employees: a generous gesture from employers and a welcome relief for rising prices.
But what is the meaning and purpose of the bonus, is it really just about relieving employees or is there more behind it?
The latter is the case: With the premium, the legislator is trying to kill two birds with one stone and directly counteract inflation. Many experts see the inflation compensation premium as an alternative to salary increases, which are vehemently demanded across industries as a result of price increases. The payment of a tax-free and social security premium is not only comparatively significantly cheaper for employers, it is also intended to avoid the dreaded wage-price spiral. This is the reciprocal continuous increase in prices and wages, which further drives and solidifies inflation. The premium may therefore certainly be a relief for employees, but its actual aim is rather to relieve employers, who can offer it as an alternative to a salary increase.
However, this implementation of the premium is not only popular among employees and trade unions: it is often argued that a one-off premium, even with staggered payments, is not sufficient to compensate for sustained price increases over the next few years.
What is the situation with you, has the payment of the inflation compensation premium already been discussed in your company and what questions are still unanswered? Feel free to share us via support@twinwin.org If you would like to discuss the topic in detail and do not yet have a suitable partner for tax matters by your side. twinwin has a reliable contact for you.
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