Employees can benefit from a bonus that can reach up to €4,645 per year, and sometimes even exceed €5,000.
These tax breaks, when combined, entitle individuals to a significant benefit that can go beyond the specified amount.
Let’s delve into the details of who is eligible for this bonus and how it can be claimed annually.
Employees pay taxes on their monthly income, deducted from their paycheck by the employer acting as a withholding agent.
At the end of the year, the employer reconciles the paid taxes with the ones due.
Generally, employees end up having paid all the necessary taxes on their employment income by year-end.
If an employee has additional income, the tax reconciliation is done when filing the annual tax return.
Deductions play a key role in determining the bonus amount, which can reach up to €4,650.
Employees are entitled to predefined deductions on their income based on different income brackets.
The calculation formulas vary depending on the income range:
Maximizing the benefit is achievable for incomes up to €15,000, where the deduction for employees amounts to €1,955, plus an additional €1,200 for a total of €3,155.
For a deeper insight into how deductions for spouses and dependents play a crucial role in maximizing the bonus, continue reading the full article here.
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