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This is how you can save on taxes as a low-income earner

2022-06-24T15:24:34.982Z


This is how you can save on taxes as a low-income earner Created: 06/24/2022, 17:15 By: Janine Napirca Who is actually a low earner? Read here how you can save taxes. According to a report by the United Income Tax Aid (VLH) , all trainees who earn a maximum of 325 euros a month are low earners . Just like people who do a voluntary social year, a voluntary ecological year or a federal voluntary


This is how you can save on taxes as a low-income earner

Created: 06/24/2022, 17:15

By: Janine Napirca

Who is actually a low earner?

Read here how you can save taxes.

According to a report by the

United Income Tax Aid (VLH)

, all trainees who

earn

a maximum of 325 euros a month are

low earners

.

Just like people who do a

voluntary social year, a voluntary ecological year or a federal voluntary

service

.

For these groups, the employer bears the entire social security contribution alone.

But colloquially, marginal employees or employees with low wages are also referred to as low earners.

According to the definition of the Organization for Economic Co-operation and Development, all those who receive less than two-thirds of the median earnings of all full-time employees subject to social security contributions are considered low-wage earners.

What do you understand by the term "low earner"?

© Clique Images/Imago

This is how you can save on taxes as a low-income earner

  • Save on income tax and contributions

    : Most people are familiar with the mini-job principle: everyone can earn up to 450 euros a month tax-free.

    The next level is the midi job.

    With this you can earn up to 1,300 euros per month in the transitional area (formerly the sliding zone) and benefit from reduced social security contributions.

    Your salary is taxed according to the wage tax card, but no wage tax is due for wage tax classes III (3) to IV (4), for tax classes I (1), II (2) and IV (4) at least the solidarity surcharge is waived, and only for classes V (5) and VI (6) you always have to pay income tax as an employee.

  • Saving the solidarity surcharge

    : As an employee, for many years you had to pay a solidarity surcharge in addition to wage tax and church tax, namely 5.5 percent of your wage and income tax every month.

    But in 2021, the federal government abolished the solidarity surcharge for almost 90 percent of employees.

    The solos are now only paid by high earners from income tax of around 17,000 euros a year.

  • Use the splitting tariff and save on taxes

    : Married and registered civil partners who "have themselves assessed together" can save income tax with the spouse splitting.

    As a rule, couples with spouse splitting pay less tax than couples who each have their income tax calculated individually.

    Above all, you will save taxes if one of you earns a lot and the other – as a low earner – earns a little.

  • Win a housing bonus and employee savings bonus

    : Everyone who does not have to pay tax on income of more than 35,000 euros a year is supported by the state with a housing bonus.

    The prerequisite for this is that you conclude a building savings contract.

    You have to pay in at least 50 euros per year, a maximum of 700 euros per year will be funded.

    This money is then subsidized by the state at 10 percent.

    For married couples, double the amounts apply, i.e. an income limit of 70,000 euros and payments of at least 100 and at most 1,400 euros per year into the building society contract.

  • Use the mobility premium

    : You can benefit from the mobility premium if your taxable income is below the starting tax rate and your one-way trip to work is longer than 20 kilometers.

    For each additional kilometer you will then receive 14 percent of the increased commuter allowance - i.e. 4.9 cents for 2021. According to the Federal Ministry of Finance, around 250,000 employees will benefit from this.

    If you only drive up to 20 kilometers to work, you will get nothing.

  • Source: United Income Tax Assistance

    Special feature for low earners:

    You do not have to pay any income tax or church tax if your annual income is less than EUR 10,347 (2021: EUR 9,744).

    That is around 862 euros per month (2021: 812 euros).

    Double the amount of EUR 20,694 (2021: EUR 19,488) applies to married couples and registered life partners.

    It doesn't matter which income tax class you have - the basic allowance is tax-free for every taxpayer.

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    (jn)

    Source: merkur

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