The Limited Times

Now you can see non-English news...

How short-time workers save taxes: reimbursement or additional payment?

2021-02-18T10:52:31.223Z


The short-time work allowance is tax-free - and yet it affects the tax return. Many people now fear additional claims from the tax office. But not everyone has to worry.


Icon: enlarge

Time for the tax return: is the big end looming?

Photo: Katleho Seisa / E + / Getty Images

The short-time work allowance is seen as a miracle cure for surviving economic crises - including those that we are currently experiencing in the fight against the coronavirus.

Thanks to short-time working, fewer people lose their jobs if their company is temporarily in poor health.

And when business is going better again later, the companies will not lack the long-serving employees.

To do this, companies apply for short-time work, send their employees home in the doldrums, and the state continues to pay part of their salaries.

That costs the public coffers money, but because the economy picks up again more quickly after the crisis, it's worth it. Otherwise, you would have had to support more unemployed people.

Nevertheless, those affected often worry: Will the employer get back on track?

Is there enough money during short-time work?

And finally there was:

Do I have to pay taxes later?

An understandable question, because anyone who receives short-time allowance is required to file a tax return.

And it looks a lot different in a year like this.

First of all: The short-time allowance is paid tax-free.

That means: It is lower than the gross salary, but because taxes and social security contributions are no longer deducted, the difference to the usual net salary is not that great.

However, short-time work benefits are subject to the progression clause.

Sounds complicated - and it is.

Jana Bauer from the Bundesverband Lohnsteuerhilfevereine explains it as follows: "When you make the tax return for the previous year, the first step is to determine how high your taxable income and the tax to be assessed is." In Germany, there is a tax progression, that is, who earns more, gets a higher percentage of his income deducted as tax - at least to a certain extent.

"To determine the tax rate, not only the total income is considered, not only the taxable portion of the gross wage, for example, but also wage replacement benefits such as unemployment benefits, parental benefits or maternity benefits," says Bauer.

And so short-time work allowance, which is a classic wage replacement benefit, also affects tax progression.

more on the subject

  • Work in the pandemic: More than half of short-time workers have livelihood problems

  • SPIEGEL survey on the economic situation: permanent shutdown only slightly clouded the confidence of Germans by Florian Diekmann

This can play a role, for example, if you get half a month's pay and the other two weeks short-time allowance.

Because the salary is only half as high for half the month, a significantly lower tax is deducted directly from the salary on the monthly payroll.

However, the short-time work allowance that flows for the second half of the month raises the tax rate.

Then you have to pay more money on your tax return because of the higher rate.

That is also the reason why, as a recipient of short-time work benefits, you are obliged to file a tax return.

Single employees who are taxed in tax class 1 are actually not required to submit a declaration.

But in years with short-time work benefits of more than 410 euros.

"In practice, most recipients of short-time allowance should be spared an additional payment if they were exclusively on short-time work for a few months and worked full in other months," says Bauer.

It cannot be ruled out across the board because so many factors play a role in the tax return, such as what is deducted in the form of advertising costs, household-related expenses or special expenses.

"However, there will be more frequent constellations in which you can still get a refund after filing your tax return."

A simple example with round numbers illustrates this and shows the difference the type of short-time work makes:

Bauer also has a tip ready for the current year: »Check your tax bracket!« If you can already foresee that you will soon have to go into short-time work, you may be able to gain an advantage in the current monthly budget.

More short-time work benefits through tax trick

Because the amount of short-time allowance is based on the last net wage, and that depends on the tax bracket.

If you switch to tax class 3 for married couples, for which the monthly net is higher, you have a little more money available in the following months.

The other spouse with whom you jointly declare the tax, however, has less net income.

“The bottom line is that it makes no difference in terms of the tax burden,” says Bauer, “because the differences are settled at the latest when you submit your tax return.

However, more or less short-time allowance is final and is not offset by the tax return. «The tax bracket can be changed as early as the following month.

It's not just completely legal.

To make such a change easier, the rules have been changed since 2020: Since then, you can change as often as you like.

On the website of the Federal Ministry of Finance there is a calculator with which everyone can determine the individual effect of the tax bracket on their monthly wages.

Icon: The mirror

mamk

Source: spiegel

All business articles on 2021-02-18

You may like

Life/Entertain 2024-02-27T09:32:48.383Z
Life/Entertain 2024-03-17T15:17:17.078Z
Life/Entertain 2024-02-22T07:51:45.865Z

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.