Germany's cabinet backed a tax relief package for workers and businesses on Wednesday, a government source said, aiming to mitigate the impact of the pandemic on Europe's largest economy with fresh stimulus.

The Fourth Corona Tax Relief Act comprises a tax exemption on bonuses for care workers up to an amount of 3,000 euros, and a batch of tax relief measures for businesses in a package that is worth a total of some 11 billion euros ($12.51 billion) through to 2025.

The German economy ended last year on a weak footing , contracting by 0.7% in the fourth quarter, slowed by restrictions introduced in the autumn to fight a fourth COVID-19 wave as well as supply chain disruptions.

The government wants the new package to support a recovery.

The bill includes provisions to allow companies to deduct some investments in 2022 more quickly from their taxes, and to offset losses against previous profits to a greater extent than before and thereby to reduce their taxes for previous years.

($1 = 0.8790 euros)

(Reporting by Holger Hansen Writing by Paul Carrel Editing by Madeline Chambers) (