The Bundesrat (Germany’s upper house of parliament) rejected the 9th amendment to the Steuerberatungsgesetz (Tax Advisory Act) on May 8, 2026. The law included a provision allowing employers to pay workers a one-time, tax- and social-contribution-free bonus of up to €1,000. The €1,000 employer bonus is now on hold.
What the bonus would have meant for you
The bonus was called the Entlastungsprämie (relief bonus). Your employer could have paid it to you voluntarily at any point in 2026 or 2027.
You would have received the full €1,000 without paying income tax or social contributions on it. Your employer would also have paid no social contributions on it.
The measure was included in the law as a response to rising living costs linked to higher energy prices. Employees and pensioners with part-time income were the main target group.
NOTE: The law has not passed. No employer can currently pay this bonus under the planned tax-free rules. Any special payment made now is subject to normal taxation.
Why the Bundesrat said no
The states (Länder) rejected the bill because of the cost to their own budgets. The bonus would have created €2.8 billion in lost tax revenue across Germany.
Under German tax law, income tax receipts are shared between the federal government, the states, and municipalities. The states and municipalities would have borne roughly two-thirds of that loss.
The federal government proposed no compensation for that shortfall. The Bundesrat’s finance committee flagged this as a reason for rejection before the vote.
The rejection was not a veto on the underlying Steuerberatungsgesetz reform. The states objected specifically to the Entlastungsprämie provision and the missing compensation.
What happens next
The federal government and the Bundestag can now call the Vermittlungsausschuss (mediation committee) between the two chambers. The Vermittlungsausschuss negotiates a compromise text that both chambers can accept. If a compromise is reached, the Bundestag and Bundesrat vote again on the revised law.
There is no set deadline for this process. The federal government has indicated it still wants the bonus to become law.
NOTE: Until a compromise law passes and is published in the Bundesgesetzblatt (Federal Law Gazette), the Entlastungsprämie does not exist in law.
