Inflation hit record highs around the world this year, sending central banks into panic mode and hitting the pocketbooks of workers everywhere.
In the U.S., politicians like Joe Biden have bemoaned higher prices and even engaged in some tough talk about oil companies that “gouge the American people.” But the government has done little in terms of directly influencing the pay of citizens.
The picture looks very different in Germany, though, where the government said it would waive taxes on inflation bonuses of up to 3,000 euros through 2024. Chancellor Olaf Schlotz said in September that it’s up to companies if they want to implement those bonuses or not, but added: “I am sure that employees will be happy to receive a tax-and duty-free payment in addition to the agreed wage.”
Since the government announced the new policy, a slew of companies have stepped up to give their workers a little boost, and about half of companies are expected to pay those types of bonuses, Reuters reported, citing a survey from the WTW consulting firm.
Volkswagen is the latest company to provide an end-of-year inflation bonus for its German workers, announcing this week the company will pay them 3,000 euros after taxes, in addition to an 8.5% wage hike over a two-year time span to some specific employees.
That will be split up into a 2,000 euro payment in February of 2023, and a 1,000 payment in January of 2024, the company confirmed to Fortune.
