The so-called relax lump sum or relax allowance is an allowance that employers can grant their employees in a tax-optimized manner. Thus, employers can reimburse their employees once a year with a lump sum for the purpose of recreation. This employee benefit is taxed at a flat rate of 25% for the employer and is not subject to social security contributions. For employees, it is exempt from both tax and social security contributions. Please note that the amounts are exclusive of church taxes.
Frequently asked questions
How much is the relax allowance?
156€ for each employee
104€ additional for spouse
52€ additional for each child
Example: Mr. Zukowski is married and has three children. He goes on vacation with his family for two weeks. A week after his return, he claims his relax allowance via the Circula app. In the following month, Mr. Zukowski receives a one-time reimbursement of €416 from his employer. Please note that the amounts are exclusive of church taxes.
Which recreational activities can be subsidized?
In general, any form of recreation can be subsidized with the help of the relax allowance. However, the prerequisite is that a "vacation" has been taken for at least 7 consecutive weekdays.
Who can use the relax allowance?
All employees can be granted the recreational allowance by the employer. This benefit can be used not only by full-time employees but also by part-time employees and working students.
How often can the relax allowance be used?
The amount can be paid once per calendar year. The entitlement includes the entire amount once. There can be no division of the amount over the year.
Is the relax allowance transferable?
No, the relax allowance is set for individual employees.
How long should the minimum leave be in order to be eligible for the relax allowance?
At least one week (7 weekdays), for example from Sunday to Saturday. If an employee has taken fewer days of leave at a time, no relax allowance can be reimbursed.
As an employer, am I obligated to provide employees with the relax allowance?
No, the relax allowance is a voluntary measure on the part of the employer.
Are vacation allowance ("Urlaubsgeld") and the relax allowance the same thing?
No, vacation allowance and recreational allowance are not the same and may be paid in parallel. They are not mutually exclusive and are both voluntary measures taken by the employer.
On what legal basis is the relax allowance based?
Paragraph 40 of the Income Tax Act (EStG) on the lump sum wage tax in special cases regulates the recreation allowance. Under paragraph 2, sentence 1, number 3 of the EStG, it is stated that the employer may levy wage tax at a flat rate of 25%, insofar as he grants recreational allowances, if these, together with recreational allowances granted earlier in the same calendar year, do not exceed 156.00 euros for the employee.
In addition to the allowance of 156.00 euros, employers are entitled to an additional 104.00 euros per year for spouses of the employee and an additional 52.00 euros per year for each child as a recreation allowance.
Do employees also pay tax on the relax allowance?
No, the recreational allowance is taxed at a flat rate of 25% for employers and is exempt from tax and social security contributions for employees. Please note that the amounts are exclusive of church taxes.
Can an employee use the relax allowance for a future vacation?
No, if an employee wants to use the relax allowance for a vacation that is in the future, was taken more than 3 months ago, or is shorter than 7 days (5 working days), the vacation allowance cannot be used.
What age may my child be in order to be able to use the relax allowance?
Children include all descendants who have not yet reached the age of 18 and dependent children up to the age of 25.
How long after their leave do employees have time to claim their vacation allowance?
Employees have 3 months to claim the relax allowance.
Note: Since the recreation allowance is only valid within one calendar year, it must be submitted and claimed within the year in which the recreation took place.
If an employee wants to claim the relax allowance in the last two weeks of the year (19.12.- 31.12), is it possible?
No, the relax allowance can always be submitted and claimed at least one week (7 days) after the end of the recreation. Since the recreation allowance expires at the end of the year (12/31), it must be claimed within one calendar year or it will be forfeited.
Do employees have to have traveled on vacation to be able to use the relax allowance?
No, the recreational allowance can be used both as an allowance for an all-inclusive trip and for a vacation at home.
When do employees receive the relax allowance?
Employees can claim their relax allowance only after they have returned from vacation. So, at least 7 days after the end of their leave, they submit it in the Circula App (leave for at least 5 consecutive days) and then receive a one-time repayment per year.
Help, I receive an error message
If an employee wants to claim the recreation allowance that is in the future, was taken more than 3 months ago or a vacation is shorter than 5 business days at a time, the relax allowance cannot be claimed and an error message is displayed in the Circula app.
Do you still have questions?
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