Work: Christmas bonuses are by no means helping everyone through inflation

Exploding heating costs and expensive groceries: In many households, additional income is very welcome, especially at the end of the year.

However, it is mainly workers who are paid according to collective agreements who can largely rely on receiving a so-called Christmas bonus in November or December. On average, 2,747 euros are paid to employees with a collective bargaining agreement, as reported by the Federal Statistical Office. Compared to the previous year, this is an increase of 2.6 percent and cannot keep up with the general rise in prices.

According to the Destatis evaluation, 85.7 percent of the employees have a collective right to special payments at the end of the year. In the east, at 88.5 percent, slightly more employees receive a Christmas bonus than in the west, at 85.3 percent. On the other hand, payments in the west are on average 157 euros higher.

With a collective bargaining agreement, there are more Christmas bonuses

However, collective agreements do not apply to all employees in Germany. In May, the Institute for Labor Market and Occupational Research (IAB) determined that 46 percent of west German and 55 percent of east German employees worked in companies in which there was no collective agreement. However, there are a large number of companies that base their payments on collective agreements without being bound by them.

Without a collective agreement, the chance of Christmas bonuses drops to 42 percent, reports the trade union Hans Böckler Foundation, citing the self-assessments of around 63,000 people who have entered their salaries on the “Lohnspiegel.de” portal. The bottom line is that a good half (54 percent) of employees in Germany receive a Christmas bonus. In this context, the left-wing member of the Bundestag, Pascal Meiser, is calling on the government to take comprehensive measures to strengthen collective bargaining coverage.

There is no legal entitlement to a Christmas bonus, as the Munich Chamber of Industry and Commerce, for example, has established. It can be agreed in individual contracts, company agreements or even collective agreements. If an employer voluntarily pays a Christmas bonus to its employees for three years without reservation, this creates a so-called “company practice” that also guarantees payments of the same amount for the coming years.

A buffer against inflation

“In view of historically high inflation rates, the Christmas bonus is more important than ever for many employees,” says Thorsten Schulten, head of the WSI collective bargaining archive at the Böckler Foundation. “It creates a buffer, at least in the short term, in order to be able to react to the increased cost of living.”

The Christmas bonus and its usually smaller counterpart “holiday bonus” have grown historically in the various sectors and are therefore very different. WSI expert Malte Lübker reports that what began during industrialization as a random Christmas gift from the factory owner was increasingly enshrined in collective agreements by the trade unions after the Second World War. “That’s why today the vast majority of employees have a secure legal right to a Christmas bonus and are no longer dependent on the goodwill of their employer.”

A 13th monthly salary or a percentage of it is quite common, but there are also fixed amounts or, as in the public sector, the combination with vacation pay to form a special annual payment. The highest amounts of an average of 5263 euros are collected by employees in the energy supply, as can be seen from the contracts evaluated by the Federal Office. The lowest amounts are in tobacco processing (564 euros) and temporary work (327 euros).