It is permissible for employers to hand out tax-exempt end-of-year bonuses as part of the 1.2% free margin, albeit that the bonus may not deviate by more than 30% from what is customary in the relevant sector. This “standard practice criterion” is to be tightened up further with effect from 2016.
Employee bonuses of up to € 2,400.00 each are considered acceptable without corroboration or substantiation being required, coming as they do within the “standard practice” bandwidth. Bonuses in excess of this maximum must be shown to be “customary” in order for them to be condoned. As an employer you have the option in consultation with your employees to swap the net bonus for gross wages and create a gross-to-net shortcut in the process.