Update | Energy relief scheme – relief premium of up to 1,000 euros for employees stopped for the time being

Update on the relief premium

The planned relief premium of up to 1,000 euros for employees has not yet been launched. 

The Federal Council did not approve the corresponding regulation on 8 May 2026 due to the lack of agreement with regard to the counter-financing of this project, so that the introduction has been stopped for the time being.

However, implementation is still possible: the federal government and the Bundestag can call on the mediation committee to reach an agreement and introduce the relief bonus after all.

We will keep you informed about further developments!

What is planned?

Based on the inflation premium, the federal government is planning to introduce a new tax- and social security-free relief premium of up to 1,000 euros per employee. The payment is intended to be made by the employer on a voluntary basis — similar to the inflation premium — and will be possible until the end of 2026.

As a comparison, employers were also able to grant the inflation premium from 26 October 2022 to 31 December 2024 voluntarily, tax- and social security-free. Both cash and non-cash benefits in kind were benefited.

The inflation premium being tax-free depended on the connection of the premium payment and the general increase in prices being clearly documented, e.g. with an corresponding reference on the transfer slip or in the payslip. The payout also had to be made in addition to employment income already owed.

This “requirement of being additional”, as it is known, is met under section 8(4) of the German Income Tax Act (Einkommensteuergesetz – EStG) if:

• the benefit is not offset against the entitlement of wages
• the entitlement to wages is not reduced in favour of the benefit
• the benefit earmarked for a certain use or purpose is not made instead of an agreed future raise in employment income and
• employment income will not be raised if the benefit is no longer provided 

It should be expected that the legislature will lay down similar conditions for the planned relief premium. 

What should companies do now?

The specific legal structure of the relief premium is currently still open. Employers that would like to grant their employees a premium should carefully follow the further legislative process.

For internal planning purposes, it may be useful to already orientate towards the existing administrative guidance on the inflation premium.. The tax authorities’ Frequently Asked Questions (FAQs) on the inflation premium are particularly helpful (updated: 24 May 2024) and accessible on the Federal Ministry of Finance website.

We will be glad to answer your questions on the planned relief premium. Contact us