Not every bonus is the same — the classification decides
German employment law distinguishes two basic types of payments on top of the base salary. The first is purely performance-related pay (rein arbeitsleistungsbezogenes Entgelt): commissions, production-based pay, target-driven bonuses. Such pay is part of the remuneration exchanged for work (the synallagma, § 611a (2) BGB) — it is earned by working, merely paid in a different rhythm than the monthly salary.
The second type are special payments (Sondervergütungen) made in addition to the current remuneration — classically the Christmas bonus (Weihnachtsgeld) or an annual special payment (Jahressonderzahlung). These may reward not only work but also loyalty to the company (Betriebstreue), or combine both purposes (a mixed character, Mischcharakter).
What matters is not the label but the purpose of the payment, which is determined by interpreting the employment contract, the bonus plan or the collective agreement (cf. BAG 02.07.2025, 10 AZR 193/24, para. 23). Everything that follows depends on this classification — so this is where any analysis of your own bonus has to start.
The first six weeks of illness: the bonus is protected
For the first six weeks of incapacity for work the employer must continue to pay remuneration (Entgeltfortzahlung, § 3 (1) sentence 1 EFZG) — at the level the employee would have earned had they worked (the lost-pay principle, Entgeltausfallprinzip, § 4 (1) EFZG). This includes variable pay components. For this period a reduction of performance-based pay is not permitted, and §§ 3 and 4 EFZG cannot be modified to the employee’s disadvantage (§ 12 EFZG).
Sick beyond six weeks: what happens to the bonus
Once the six weeks are exhausted, the employer stops paying and the employee receives sickness benefit (Krankengeld) from the health insurance fund. This is exactly the period the judgment 10 AZR 193/24 deals with. An insurance agency account manager was ill for a total of 191 days in 2021, of which 149 days fell outside the continued-pay period. From the calculated variable pay of EUR 31,291.20 gross the employer deducted the share attributable to those 149 days. The BAG upheld the reduction, putting the rule like this:
„Für Zeiten der Arbeitsunfähigkeit ist sie außerhalb des Zeitraums von § 3 Abs. 1 EFZG nicht geschuldet, sondern entfällt nach § 326 Abs. 1 Satz 1 BGB.” (para. 21)
In English: for periods of incapacity outside the six-week window of § 3 (1) EFZG, performance-based pay (the quote’s “sie” refers to the production-based pay) is simply not owed — the claim lapses under § 326 (1) sentence 1 BGB. This reflects the general principle “no work, no pay” (Ohne Arbeit kein Lohn): where performing the work becomes impossible, the duty to work falls away (§ 275 (1) BGB) and with it, as a rule, the claim to the counter-performance.
The most important practical consequence: the employer needs no reduction clause in the contract or works agreement at all:
„Einer expliziten Kürzungsregelung bedarf es dafür nicht, da sich der Wegfall des Anspruchs auf die Gegenleistung aus dem Gesetz ergibt.” (para. 23)
The lapse of the claim follows directly from statute. In the decided case an earlier works agreement had contained express reduction clauses that were not carried over into the new version — and that changed nothing, because the right to reduce exists independently of them.
The arithmetic is straightforward: the reduction mirrors the proportion of periods without pay entitlement. In the case it ultimately came to 149/365 of the annual variable pay — the courts merely corrected a minor calculation error of the employer (EUR 177.41 in the employee’s favour), who had used a 360-day instead of a 365-day year.
Targets met — and the bonus still cut. Lawful?
Yes — and this is the point that surprises most employees. In 10 AZR 193/24 the claimant’s team had met the targets at 100 %. In the twin case 10 AZR 119/24 the sales partners assigned to the claimant had exceeded the targets, reaching 148.1 %. In both cases the BAG approved the proportionate reduction. The degree of target achievement only determines the amount of the payment on the assumption that work was performed — it does not replace the work itself, which remains the consideration for the pay.
The principle has limits. Periods of annual leave and periods of default of acceptance by the employer (Annahmeverzug) do not justify any reduction, because for those periods remuneration is owed by force of statute (§ 11 BUrlG, § 615 sentence 1 BGB). Only periods without pay entitlement may reduce the bonus.
The Christmas bonus during illness: § 4a EFZG and the one-quarter cap
Special payments (Sondervergütungen) that also reward loyalty — the usual classification of the Christmas bonus — follow entirely different rules. Here § 4a EFZG applies: a reduction for sickness periods is only permitted if it has been agreed — in the employment contract, a works agreement or a collective agreement (cf. BAG 10 AZR 193/24, para. 23, referring to BAG 03.07.2024, 10 AZR 171/23). Without such a clause the Christmas bonus remains payable in full despite illness — even a long one.
Where a clause exists, statute sets a hard cap: for each day of sickness the reduction may not exceed one quarter of the remuneration attributable on average to one working day (§ 4a sentence 2 EFZG). Example: with an average daily wage of EUR 150 the Christmas bonus may be reduced by at most EUR 37.50 per sick day — 30 sick days allow a reduction of at most EUR 1,125.
A note for public-sector employees: collective agreements (such as the TVöD with its annual special payment) contain rules of their own — always check the applicable collective agreement first.
Parental leave and other suspended periods: BAG 10 AZR 119/24
In 10 AZR 119/24 the employee had taken 62 calendar days of parental leave (Elternzeit) in 2022. The BAG confirmed: during parental leave the employment relationship continues but is dormant (das Arbeitsverhältnis ruht) — the mutual principal obligations, work and pay, are suspended (para. 24 et seq.). The employer was therefore entitled to reduce the variable pay by EUR 7,416.36 out of a calculated EUR 43,062.74 gross, although the targets had been exceeded by almost half. The same logic covers other dormant periods, such as unpaid special leave.
And if the employer never set any targets?
That is the mirror-image situation, and it follows mirror-image rules. Where an employer obliged to set bonus targets never announced them, the employee can claim damages equal to the lost bonus after the year has ended — with a presumption of 100 % target achievement (BAG 22.04.2026, 10 AZR 28/25). We discuss this in detail here: Bonus targets never communicated — full damages. Note the interface of the two lines of case law: even when damages are calculated, periods without pay entitlement reduce the hypothetical bonus.
What to check before disputing a bonus cut
- Character of the payment: what exactly does the bonus reward under the contract, plan or collective agreement? This decides whether the reduction required a clause or followed from statute.
- Count the days: how many sick days fell outside the six-week continued-pay period? Only those days may reduce performance-based pay — and only proportionately.
- Reduction clause: for the Christmas bonus and other special payments a reduction without a clause is unlawful, and with a clause it is capped at one quarter of the average daily wage per sick day.
- Forfeiture clauses (Ausschlussfristen): contracts and collective agreements typically allow three months to assert the claim in text form, often with a second stage — another three months to file suit. After that the claim is irretrievably lost. The statutory three-year limitation period (§ 195, § 199 (1) BGB) runs independently.
- Documents: bonus statements from previous years, payslips covering the sickness period, correspondence about targets. Bonus disputes often surface only on exit — next to the Aufhebungsvertrag and the taxation of the severance payment.
Bonus cut after sickness — how to check whether it was lawful
Establish the character of the payment: remuneration for work, or a loyalty-type special payment such as the Christmas bonus. Count the sick days beyond the six weeks of continued pay — only these justify a proportionate cut of performance-based pay. For the Christmas bonus, check whether a reduction clause exists at all and whether the cap of one quarter of the average daily wage per sick day was respected. Check the forfeiture clauses (Ausschlussfristen) and assert your claim in writing before they expire.
Frequently asked questions
No bonus because of sick leave — can the employer simply do that?
The employer may reduce performance-based pay proportionately for sick days beyond the six-week continued-pay period (BAG 02.07.2025, 10 AZR 193/24). It may not touch the first six weeks, and it may not cut the Christmas bonus without a contractual clause.
I met my targets and the bonus was still reduced — is that lawful?
A proportionate reduction is lawful even where targets were met or exceeded (10 AZR 193/24: 100 %, 10 AZR 119/24: 148.1 %). What would be unlawful is refusing the bonus altogether for a partly worked year.
Does the bonus count during the first six weeks of illness?
Yes. Continued pay covers the variable components the employee would have earned had they worked (§ 4 (1) EFZG).
How much may be deducted at most?
For performance-based pay the limit is the proportion of periods without pay entitlement (for example 149 out of 365 days). For the Christmas bonus with a reduction clause — one quarter of the average daily wage per sick day (§ 4a EFZG).
Does receiving Krankengeld change anything?
Sickness benefit is paid by the health insurance fund and is not remuneration from the employer. Periods on Krankengeld are precisely the periods without pay entitlement by which performance-based pay may be reduced proportionately.
Does parental leave reduce the bonus as well?
Yes. During parental leave the employment relationship is dormant, so the employer may reduce performance-based pay proportionately for those periods, even where targets were exceeded (BAG 02.07.2025, 10 AZR 119/24).
Sources: BAG, judgment of 02.07.2025 — 10 AZR 193/24 (ECLI:DE:BAG:2025:020725.U.10AZR193.24.0), lower courts: ArbG Düsseldorf, 22.12.2023 — 7 Ca 2952/23, LAG Düsseldorf, 21.05.2024 — 3 SLa 14/24. BAG, judgment of 02.07.2025 — 10 AZR 119/24 (ECLI:DE:BAG:2025:020725.U.10AZR119.24.0). BAG, judgment of 03.07.2024 — 10 AZR 171/23 (cited via the official text of 10 AZR 193/24). BAG, judgment of 22.04.2026 — 10 AZR 28/25. Quotes from the official texts. §§ 3, 4, 4a, 12 EFZG, § 11 BUrlG, §§ 195, 199, 275, 326, 611a, 614, 615 BGB. This article is for information purposes and does not replace legal advice in an individual case.