Einmalbezug (One-off payment)

One-off payments, also known as lump sum payments, are non-recurring special payments made by an employer to an employee in addition to regular salary or wages. These payments are typically tied to specific occasions or performance-based criteria and do not represent ongoing compensation.

Common examples of one-off payments include:

• Christmas bonuses
• 13th or 14th month salary
• Vacation pay
• Profit sharing
• Annual bonuses
• Attendance bonuses paid annually
• Gratuities

For income tax purposes, one-off payments fall under the category of “other benefits” (in German tax law: sonstige Bezüge). They are subject to mandatory taxation and must be reported accordingly.

Legal Framework

Labor Law (Works Constitution Act – BetrVG)

The Works Council (Betriebsrat) has a legal right to participate in decisions regarding the distribution of one-off payments according to:

• Section 87 (1), No. 10 – Relating to wage structures
• Section 87 (1), No. 11 – Regarding performance-based bonuses or similar

This co-determination ensures fair and transparent allocation of lump sum benefits, especially in collective or group-wide contexts.

Social Security Law (SGB IV)

• Section 22 (1), sentence 2 of the German Social Code IV (SGB IV) governs the time allocation of one-off payments. This determines the specific payroll period to which the payment is assigned.
• Section 23a SGB IV contains the detailed rules for calculating contributions on one-off payments across all branches of German social insurance (pension, health, long-term care, unemployment).

Taxation and Social Insurance (SV)

One-off payments are generally subject to both income tax and full social insurance contributions, although their treatment may differ from regular salary due to timing and statutory ceilings (BBG – Beitragsbemessungsgrenze).

The “March clause” (Märzklausel) is a key rule that can retroactively assign payments made in January through March to the previous calendar year if the payment relates to that period. This affects both tax and social insurance contribution calculations.

Practical Considerations

One-off payments require careful treatment in payroll due to their irregularity. Key factors include:

• Timing of payment – Can affect contribution year.
• Insurance status changes – If an employee starts or ends an insurance obligation mid-year, proper proration and timing is essential.
• Change in contribution group – Affects how the payment is split across insurance branches.
• Retroactive corrections – If one-off payments are recalculated, they may be treated as new lump sum payments, leading to different contribution requirements.

Examples of Practical Scenarios:

• A Christmas bonus is paid in February and must be allocated to the previous year due to the March clause.
• An employee leaves mid-year but receives vacation pay afterward. This must be handled carefully under Section 22 SGB IV.
• A mini-jobber moves to a full employment contract, and a one-off bonus is paid later. The BGRS must reflect this change.

Employer and Employee Rights

No Automatic Legal Right

There is no automatic entitlement to one-off payments under German law. They are not mandatory, unless:

• Specified in the employment contract
• Covered by a collective bargaining agreement (Tarifvertrag)
• Established by consistent past practice (betriebliche Übung)
• Agreed in works council agreements (Betriebsvereinbarungen)

Repayment or Waiver

Employees may sometimes waive their right to a one-off payment, or may be required to repay it (e.g., if a condition for the bonus was not met – known as a condition subsequent).

Summary

One-off payments are a valuable component of compensation systems, offering flexibility for employers and rewards for employees. However, they come with complex legal, tax, and social insurance implications, especially regarding timing, contribution ceilings, and employment changes. Accurate classification, calculation, and documentation are essential for compliance and fairness.