Gehaltswaage

Christmas bonus

In Germany the Christmas bonus (Weihnachtsgeld) is a voluntary or collectively-agreed special payment, taxed as an “other payment” (sonstiger Bezug) at your marginal rate under § 39b para. 3 EStG – not tax-favoured like Austria’s 13th/14th salary. This page explains the difference.

No statutory Christmas bonus – and no favourable tax rate§ 39b para. 3 EStG

Two things surprise many people new to working in Germany. First, the Christmas bonus (Weihnachtsgeld) is not a legal requirement. It is a voluntary or collectively-agreed special payment; whether you get it depends entirely on your employment contract or an applicable collective agreement – not on the law.

Second, even when it is paid, it gets no cheaper tax rate. The bonus counts as an “other payment” (sonstiger Bezug) and is taxed at your ordinary marginal rate – the rate that applies to the top slice of the rest of your income. Germany has neither a mandatory 13th salary nor a separate, milder tariff for it.

The contrast with Austria

This is the sharpest difference between the German and Austrian pay systems – and it runs the opposite way from what you might expect. In Austria the 13th and 14th salary (holiday and Christmas pay) are built in: almost every employee expects them, and – within the so-called annual-sixth (Jahressechstel) – they are taxed at their own, markedly lower flat rate. An Austrian calculator that left them out would look broken.

Germany has neither: no statutory right to a 13th salary and no favourable taxation for it. Where Austria has a predictable, tax-privileged special payment, Germany treats the same payment as an ordinary other payment at your full marginal rate. That is why a German monthly calculator can show a clean net figure without pricing in the Christmas bonus – here it is not a fixed part of the system but a contractual extra.

How an other payment is taxed

An “other payment” is one that does not belong to your running monthly wage but falls due once – a Christmas or holiday bonus, a premium, a back payment. For the wage-tax deduction such a payment is not simply added to the month. Instead, § 39b para. 3 EStG prescribes its own procedure:

  • Project. The employer works out your expected annual pay – the running wage annualised.
  • Compute twice. They calculate the annual wage tax once without and once with the Christmas bonus.
  • Take the difference. The gap between the two is the wage tax withheld on the bonus.

The upshot: the bonus is placed on top of the rest of your annual income and taxed at your marginal rate – the rate on each additional euro earned. For higher earners that can reach the top rate of 42%; above the 277.825 €“wealth-tax” threshold the maximum rate of 45% applies. Because the wage tax is the base, the same payment also carries the solidarity surcharge (5.5% of the wage tax, above its exemption limit) and – for church members – church tax (8% in Bavaria and Baden-Württemberg, otherwise 9%). There is no separate, lower “Christmas-bonus tariff”: it is the same progressive tariff, merely applied to a one-off payment.

Why this calculator does not work out the Christmas bonusNot computed

The § 39b para. 3 EStG procedure needs an input a monthly-only calculator does not hold: your projected annual pay. Without that figure the tax on the Christmas bonus cannot be worked out honestly – the result depends on how much you earn across the whole year.

We cited the procedure but deliberately did not build it out or walk the arithmetic. We would rather show no number than a wrong one. The monthly calculator on the home page therefore prices your running monthly pay; the Christmas bonus is explained on this page rather than quantified. Computing the other payment is a possible next step for a later version.

And social insurance?

Alongside tax, a one-off payment is in principle also subject to social-insurance contributions – capped by the contribution ceilings of health, long-term care, pension and unemployment insurance. One-off payments follow their own rules (for instance on which period the contribution is assigned to), which are not worked through in detail here. They are deliberately neither modelled nor computed; this note stays general and is no substitute for your employer’s actual payslip.

Frequently asked questions