Berlin, April 20, 2026 The German federal government plans to extend the tax-free allowance for employers to pay employees a relief bonus of 1,000 euros until June 30, 2027, as part of broader measures to cushion the impact of rising prices.
Relief Measures Extended
The government’s decision to prolong the tax-free relief bonus comes amid ongoing economic pressures, particularly in the energy sector. The allowance, initially introduced as a temporary measure, will now cover payments made in 2026 and 2027, providing employers with continued flexibility to support their workforce. Chancellor Friedrich Merz emphasized the extension’s scope, stating it should apply "für das Jahr 2026 und auch für das Jahr 2027" ("for the year 2026 and also for the year 2027").
The relief bonus, which is exempt from income tax and social security contributions, was first implemented to help citizens cope with rising living costs. Employers can voluntarily pay the one-time sum to employees, offering immediate financial relief without additional tax burdens. The extension aligns with the government’s broader strategy to mitigate the effects of inflation, particularly in energy and fuel prices.
Fuel Tax Cuts and Broader Support
In addition to the relief bonus extension, the government has announced a temporary reduction in fuel taxes. Starting May 1, taxes on diesel and gasoline will be cut by approximately 17 cents per liter for two months. This measure aims to provide immediate relief to households and businesses grappling with high transportation and energy costs.