As of: January 31, 2024, 5:14 a.m
By: Dieter Tannert
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At the beginning of the year, the income limits for obtaining the employee savings allowance were raised.
This makes saving with capital-forming benefits interesting again.
A lucrative way to build wealth is to conclude a securities savings contract in accordance with the Fifth Capital Creation Act, also known as capital-forming benefits.
The employee can request that the employer conclude a corresponding savings contract with a credit institution, provided that he or she pays at least 13 euros per month.
The credit institution with which the contract was concluded uses the money to purchase stocks or shares in funds or ETFs for the employee.
There are also often collective bargaining agreements that require the employer to pay subsidies for such savings.
Many employers also provide something on their own initiative upon request.
Anyone who does not conclude such a contract is simply wasting money.
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Employee savings allowance increases returns
In order to support low incomes in accumulating assets, the state grants the so-called employee savings allowance if a securities savings contract has been concluded.
Previously, employees with a taxable income of up to 20,000 euros per year or, for married couples, a total of 40,000 euros could apply for the allowance.
The allowance is 20% of the amounts deposited, up to a maximum of 80 euros annually.
The income limits were raised on January 1, 2024, namely to 40,000 euros annually for single people and 80,000 euros for married people.
The decisive factor is the so-called taxable income, i.e. not the employee's gross salary.
For example, professional expenses or contributions to pension and health insurance are deducted from gross income.
However, the employee savings allowance is only granted if you pay into such a contract for at least six years and then it is suspended for another year.
During this dormant phase, a new securities savings contract can already be concluded.
Save a nice sum with little money through capital-forming benefits.
© IMAGO/Steidi
What does such a savings agreement ultimately bring?
The Federal Association of Investment Fund Providers (BVI)
calculates what return can be achieved if one concludes such a securities contract
.
For example, with a monthly investment of 40 euros in a share savings contract in German stocks, an average return of 7.29% is achieved at the end of seven years.
In numbers, this means that at the end of the six-year deposit period and the one-year rest period, a capital of 3,857 euros will be saved.
Added to this is the annual employee savings allowance of 80 euros, which adds 480 euros for six years.
This means that after six years you would have a total of 4,337 euros in credit.
For married people, this could be double the amount, i.e. an impressive 8,674 euros.
The entire employee savings allowance is only paid out to the employee in one sum at the end of the seventh year.
But you shouldn't forget to apply for the employee savings allowance every year with your tax return.
This is very simple: you put a cross on the first page of the cover sheet in your income tax return and later put a 1 in the box “Determination of the employee savings allowance”.
Who can receive the employee savings allowance?
As the name suggests, only employees are entitled to receive such an allowance.
From the outset, civil servants and soldiers are also on an equal footing with employees.
Some people overlook the fact that ultimately you just have to be in an employment relationship.
For example, if you have a mini-job, you must meet the requirements to apply for corresponding savings benefits from your employer.
This also applies to pensioners or self-employed people who only have a part-time mini-job, as a spokesman for the Federal Ministry of Finance confirmed to
IPPEN.MEDIA
.
Here too, a securities savings contract can be concluded in order to receive the employee savings allowance - as long as the income limits are met.