In March, the government announced that it would give a one-off payment of 300 euros to everyone in Germany, to help households cope with the rising cost of energy. The money is now set to hit bank accounts in September, but not everyone will be receiving the full amount. Here’s what we know about the energy relief payment. 

What do we know about the energy relief payment in Germany?

While the federal government debates further relief measures to help cushion citizens from rising utility bills, the first round of support - which was announced in March as part of an energy relief package - has not been fully paid out yet. In September, millions of workers in Germany are set to receive their promised flat payment of 300 euros. 

But who is eligible for the flat rate, how will it be paid out, and how much is it exactly? Here’s a brief explainer. 

Who receives the energy subsidy (Energiepreispauschale)?

The traffic light coalition previously announced that the flat rate should be paid out to everyone in Germany. However, this would be tricky to implement, as not everyone in the country pays taxes or is on the government’s “books”, so to speak. 

Therefore, a compromise was reached where every employee should receive the money along with their regular salary package in September. According to the Finance Ministry, the payment should “relieve those sections of the population that typically incur travel expenses in connection with their income generation” - that is, people who drive to work or travel by public transport and therefore have higher costs. 

Broadly speaking, the money will be paid out to anyone who lives and works in Germany or commutes across the border for work, including employees, self-employed workers, trainees, civil servants, soldiers, board members, mini-jobbers and temporary workers. Employees who are in partial retirement will also receive the lump sum. 

How and when will the subsidy be paid out?

The energy lump sum is due to be paid along with your regular salary in September. If you’re self-employed, your advance tax payment for September will be reduced accordingly. If you were employed at the beginning of the year but have since lost your job, you can still receive the money via a special section in your 2022 tax return. 

How much of the 300-euro lump sum will I receive?

It’s worth noting that few people will receive the full 300 euros, because the lump sum is subject to taxation (but not contributions to social security). This is to ensure that more money goes to those who need it most. 

According to the Ministry of Finance, the average employee will receive a net payment of around 193 euros. Anyone whose taxable income is below the basic allowance of 10.000 euros will receive the 300 euros in full; top earners with an annual salary of around 72.000 euros will receive 180 euros, and those with even higher earnings will get less. 

On the other hand, anyone with zero taxable income will receive nothing - this includes many pensioners and people studying in Germany. 

More relief is on the way

With more and more energy suppliers in Germany announcing price increases for the coming autumn and winter, it’s not clear exactly how much the lump sum will really offset the rising cost of living. 

The federal government is therefore currently working on a second energy relief package which should benefit other population groups, including pensioners. Federal Finance Minister Christian Lindner has also unveiled plans to provide significant tax relief for all taxpayers from next year.