Night, Sunday and holiday work is core business in the security industry, in Germany as elsewhere. That's what makes so-called SFN bonuses (Sonntags-, Feiertags- und Nachtzuschläge — Sunday, holiday and night bonuses) so significant: under German § 3b of the Income Tax Act (EStG), they can be paid out tax-free, a noticeable difference on an employee's payslip. At the same time, few areas of payroll preparation are this error-prone. This article summarizes the rates, limits and pitfalls under German law.
The tax-free bonus rates at a glance
German § 3b EStG makes bonuses tax-free as long as they don't exceed certain percentages of the base wage:
| Working time | Tax-free up to |
|---|---|
| Night work from 8 pm to 6 am | 25% of base wage |
| Night work from midnight to 4 am, if work started before midnight | 40% of base wage |
| Sunday work (midnight to midnight) | 50% of base wage |
| Statutory public holidays, and December 31 from 2 pm | 125% of base wage |
| December 24 from 2 pm, December 25 and 26, and May 1 | 150% of base wage |
The night bonus can be combined with the Sunday or holiday bonus: someone working the night from Saturday into Sunday can receive both the night and the Sunday bonus tax-free for the Sunday hours. The Sunday and holiday bonuses, on the other hand, are mutually exclusive: if a holiday falls on a Sunday, the higher holiday rate applies.
The base-wage limits
Two caps limit the tax advantage:
- Tax exemption: For calculating the tax-free bonus, the base wage is only taken into account up to €50 per hour.
- Social security exemption: Bonuses stay exempt from social security contributions only as long as the underlying base wage doesn't exceed €25 per hour.
Requirements: no tax exemption without individual records
Under German law, the tax exemption isn't automatic, it only applies under narrow conditions:
- The bonus must be paid in addition to the base wage — a bonus "carved out" of the hourly wage after the fact doesn't qualify.
- It must be paid for work actually performed during the qualifying hours. Bonuses paid for vacation or sick days are taxable.
- Individual records are required: for every employee, it must be traceable how many hours they worked within which qualifying time window. Flat-rate bonuses are only permitted as an advance payment with an annual individual reconciliation.
Public holidays are set by the German states
Which days count as statutory public holidays is decided by Germany's individual federal states (Bundesländer) — All Saints' Day is a holiday in North Rhine-Westphalia but not in Berlin; Augsburg even has its own local holiday, the Friedensfest. What counts for the bonus calculation is the holiday status at the site where the work is performed. Anyone operating sites across several German states therefore has to account for different holiday calendars per site.
Common mistakes in practice
- Shifts aren't split at the time boundaries (8 pm, midnight, 4 am, 6 am, 2 pm) but assessed as a flat rate.
- The 40% rate is applied even when work only started after midnight.
- The Sunday and holiday bonuses are added together, even though only the higher rate applies.
- Holidays are assessed by the company's registered address instead of the site where the work is performed.
- Bonuses are left tax-free even for vacation and sick days.
Automate instead of recalculating by hand
GuardEinsatz automatically splits every recorded shift into the qualifying time windows under German § 3b EStG, including a public-holiday calendar per federal state, and hands the results to payroll as an itemized statement via CSV export. The basis for this comes from minute-accurate times recorded through GPS time tracking. For an overview of all the building blocks, see the features page.