€1,000 Tax-free Bonus And Fuel Tax Cut

Germany’s ruling coalition agreed on April 13, 2026 the two measures to offer relief mid energy crisis.

• Employers can pay their workers a voluntary, tax- and social-contribution-free bonus of up to €1,000 before the end of 2026.
• Fuel tax on petrol and diesel will be cut by around 17 cents per litre for two months.

Both measures are a direct response to rising fuel prices triggered by the Iran conflict and blockade of the Strait of Hormuz. The Federal Ministry of Finance published the package on its website under the name Energie-Sofortprogramm (energy emergency programme).

The coalition leadership of CDU, CSU and SPD negotiated over the weekend and announced the results at a press conference on Monday, April 13. A cabinet decision on the required legislation is scheduled for April 29, 2026.

The fuel tax cut

The current energy tax on petrol stands at 65.45 cents per litre and on diesel at 47.04 cents per litre. These rates have not changed since 2003. The government intends to reduce both by around 17 cents per litre gross (including 19% VAT) for two months.

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The total cost to public finances is estimated at around €1.6 billion for the two-month period. The government expects the oil industry to pass the full price reduction to the customer and announced parallel measures to tighten competition law.

The Koalitionsvertrag did not specify the exact start date of the tax cut. Legislation must first pass parliament.

NOTE: The 2022 tank discount (Tankrabatt) reduced the fuel tax by roughly the same amount for three months. Pump prices did fall then, but not always by the full tax reduction. Whether petrol station operators pass on the cut fully is not legally guaranteed beyond political pressure.

The €1,000 Entlastungsprämie

The German government has announced that employers can (not required) pay employees a bonus of up to €1,000 free of income tax and free of all social insurance contributions (Sozialabgaben).

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That means the full €1,000 lands in the employee’s bank account without any deductions. Your gross equals your net for this amount.

The measure is modelled on the Inflationsausgleichsprämie that ran from October 2022 to December 2024. Under this measure, employers could pay up to €3,000 tax-free.

According to figures from the Federal Statistical Office (Destatis), around 86% of collectively-bargained employees received that bonus. The government expect a similar result with the new 1000€ bonus.

Based on how the 2022–2024 version worked, the following conditions are expected to apply. Note that the legislative text is not yet published.

• The payment must be in addition to the salary already owed. You cannot replace existing contractual pay, agreed bonuses, or Christmas money with the Entlastungsprämie. It must be an extra.
• It can only be paid by employers to employees in an active employment relationship (Arbeitsverhältnis). Sole traders, freelancers, and the self-employed are excluded from receiving it.
• The payment must be made within the 2026 calendar year.
• Employers can deduct the payment as a business expense (Betriebsausgabe).
• The legal basis will be an amendment to the Income Tax Act (Einkommensteuergesetz, or EStG), similar to the former § 3 Nr. 11c EStG.

NOTE: The relief payment was originally planned for 2026 only. However, it is extended to 2027.

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The Federal Finance Ministry has said it will regulate the details in a BMF administrative letter (BMF-Schreiben) once the law passes.

NOTE: The law has not been passed. The cabinet vote is scheduled for April 29, after which the bill must pass the Bundestag.

Who receives it and who does not

For public sector salaried employees (Tarifbeschäftigte), current collective agreements for federal and municipal workers (TVöD) and state workers (TV-L) do not include an Entlastungsprämie and run until 2027 and 2028 respectively.

A tarifvertraglich binding payment is therefore not achievable in the 2026 window.

Their employers can still voluntarily decide to pay it outside the tariff framework, but there is no obligation.