Volunteering can also be financially rewarding – tax-free lump sum of up to 3,000 euros

The joy of being able to help others is at the forefront of volunteer work. The tax authorities reward their personal commitment with tax breaks.

Whether in a sports club, in the fire brigade or in social and cultural institutions: there are volunteers in many areas of life. Practicing such a voluntary position – you can help other people or make them happy – and learn a lot yourself as well as benefit immensely personally. The joy of being able to help others is in the foreground. Those who volunteer can also benefit from their tax returns.

Running in a group is often much more fun than alone. For example, you can volunteer as a trainer in a sports club.

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1. Trainer allowance: 3,000 euros per year

Trainers are entitled to the trainer allowance of 3,000 euros per year, as the wage tax assistance association Vereinigte Lohnsteuerhilfe (VLH) informs, until the 2020 tax return it was 2,400 euros. According to the tax experts, this means that the remuneration remains exempt from tax and social security contributions up to the amount of the trainer allowance.

"In order to benefit from the trainer allowance, you must, for example, be a trainer in a sports club, a choir director in a singing club, a lecturer at an adult education center or an instructor in the volunteer fire department," the VLH said in a statement. In other words: "Your work must be pedagogically oriented." And a few more conditions must be met:

• The activity must be carried out on a part-time basis. "In concrete terms, this means that volunteering may not account for more than a third of a full-time job," explains the VLH in its statement.
• The trainer allowance can only be claimed if you work voluntarily for a non-profit organization or a legal entity under public law – "these can be schools, communities or churches".
• In addition, volunteering must "directly or indirectly serve charitable, charitable or ecclesiastical purposes," it continues.

According to the experts, the trainer allowance cannot be used "if, for example, you are a secretary or equipment manager in a sports club, work as a referee in your spare time, interpret for courts and notaries on a voluntary basis or train animals". After all, according to the VLH website, you may be able to benefit from the volunteer allowance, which is also referred to in tax law as the so-called volunteer allowance.

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2. Volunteer allowance: 840 euros per year

Since 2013, volunteers who are involved in a non-profit association or with legal entities under public law have been able to claim the volunteer allowance described above, as the VLH specifically states about this possibility. "Currently, it is 840 euros per year, until the 2020 tax return it was still 720 euros." In this case, too, this means that an expense allowance up to the amount of the volunteer lump sum remains exempt from tax and social security contributions. "In contrast to the trainer's allowance, a treasurer or treasurer, groundskeeper or equipment warden, referee or animal keeper may also use the volunteer allowance," the VLH describes using examples. Again, three conditions must be met:

• This is also a part-time activity, "i.e. it may only account for a maximum of one third of a full-time job," emphasizes the VLH.
• Another requirement is that you do voluntary work for a non-profit organization or a legal entity under public law.
• And the volunteer work must serve "non-profit, charitable or ecclesiastical purposes".

Lump sums for the respective volunteer work only once a year

What those affected should know: Even if you hold several honorary positions in parallel or one after the other, there is the respective lump sum for volunteering – i.e. the trainer allowance and the volunteer allowance – "only once a year," the tax experts explain.

If the earnings are above the allowances, taxes are due

"If an instructor or supervisor earns more than 3,000 euros and a volunteer earns more than 840 euros per year, the part of the income that exceeds the allowance must be entered as income from other self-employed work in the tax return," according to the important note of the VLH, according to its statement.

Use Appendix N of the tax return

Employees enter the expense allowance received in Appendix N of the tax return – "namely in line 27 the amount of tax-free income received and in line 21 the sum that may exceed the allowance," said Jana Bauer of the Federal Association of Wage Tax Assistance Associations, according to an earlier report by dpa. The sum in excess of the allowance is taxed at the personal tax rate.

"In general, it is possible to benefit from both the trainer allowance and the volunteer allowance," the expert emphasized in the article. However, this presupposes that the two honorary positions are remunerated separately and that they are different activities in each case.

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The waiver of the expense allowance also has an effect

Another option is to claim a so-called expense donation for tax purposes. In other words, anyone who does not accept money for his or her volunteer work from the organization for which he or she works can deduct the expense allowance to which he or she is theoretically entitled in the tax return as a special expense, the report continues. For this, it is important that the renunciation of the money is agreed in writing, said Bauer dpa, according to dpa. For this purpose, the respective organization can hand over a donation receipt, which must be presented to the tax office on request.

Volunteering: Keep evidence for the tax office

In other respects, too, the so-called obligation to keep receipts applies to the volunteer and trainer allowances. "So you don't have to attach proof of the activity to your tax return from the outset, but only submit it if the tax office explicitly wants it." Whether it's a payslip or a tax assessment – there is also a retention period for many other important documents.

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