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Christmas Bonus

Definition, Explanation

Tips, Checklist

Definition, Explanation

A Christmas bonus is paid by the employer to the employee, mostly along with November's wage. Entitlement is constituted in tariff-agreements/collective agreements, or in a company agreement or in the employment contract. It can also be a voluntary payment from the employer' side. This voluntary, (non-agreed) payment can result in legal entitlement if for 3 years in a row it was paid, for reasons of so-called company practice, in case that the voluntary aspect has not been noted ar explicitely stated. Explicite statement would mean to inform every employee.

According to equal treatment law which covers the whole company, differences among Christmas bonuses are only allowed for factual reasons like membership, but not levels of education or performance-evaluation. Factual reasons can allow for cuts on Christmas bonuses.

For employees in public service, Christmas bonuses are referred to as annual special payments. The amount is not unified throughout Germany but underlies regulations of single federal states.

Tips, Checklist

• First, inform yourself if you are entitled to Christmas bonus by collective agreements, company agreements or your employment contract, or it is derivable from „company practice“
• Ask colleagues if they have been paid Christmas bonuses and of what amount
• Inform yourself about requirements and constraints
• Inform yourself at the works council

Last update: 02/24/2010