Although the concept of short-time work has been known for years, it has only gained significance since the coronavirus pandemic. In 2020 and 2021, many employees in Germany will encounter for the first time a “reduction” of their full-time employment as well as a short-time allowance for the first time. Does the allowance affect the annual tax return in any way? What does the tax return for part-time work look like? Today we discuss the most important questions about the benefit and how it affects taxes – enjoy reading!
Short-time allowance – a response to layoffs
Those who are affected by short-time work because a company, for example, has fallen into a financial crisis due to the current pandemic, can count on a special benefit from the German state . It was created to. Das short-time allowance compensate for the wage losses of the employees at least partially. employees at least partially. compensate.
Short-time allowance 2025 – how much can you get?
How much is the short-time allowance? This depends on the employee’s situation.
- If you did not have children at the time of dismissal, you will receive a short-time allowance equal to 60% of the lost net wage. 60% of the lost net wage.
- If you are a parent and entitled to child benefit, you receive an allowance of 67% of your salary.
It’s not for nothing that we previously wrote that this benefit is a reaction to a pandemic situation – after the regulation related to the corona crisis it increases short-time allowance in Germany after four months for those whose income has decreased by at least half.
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- From the 4th month, the benefit increases to 70% or 77% of the salary.
- From the 7th month of receipt, employees receive up to 80% or 87% of the part-time money (short-time work).
Note: The months from March 2020 will be counted in the calculation of the reference months.
German short-time allowance and taxes – What does it look like in practice?
“Tax on short-time work in Germany”, “Does the short-time allowance have to be taxed? are examples of topics that raise many questions. raise many questions. This is not surprising, as this benefit is a novelty and therefore still a mystery to many, especially with regard to taxation.
It’s worth knowing that anyone who has used the allowance for part-time work, paid less tax during this period, than they would have paid on a normal gross salary . However, it is important to note that the short-time allowance itself is tax-free. However, this does not mean that it is indifferent to the tax authorities. It is treated as income and can increase the tax rate als Einkommen behandelt und kann den Steuersatz erhöhen.
Tax return and short-time allowance – do you have to declare it on your tax return?
If you received at least 410 € salary for part-time work in a year, you must declare this income on the next tax return and submit it to the tax office. This also applies to other wage replacement benefits, such as parental allowance. It is important that it
Wichtig ist, dass es doesn’t matter whether the work is reduced by 10% or 50% – for the office, it only matters whether the allowance exceeds the mentioned 410 €.
Tax refund and short-time work in Germany – either over or underpaid!
Can you expect a tax refund for short-time work in Germany? It depends – you may have to make additional payments to the tax authorities – but let’s start from the beginning.
As we have already mentioned, is subject to das short-time allowance progression, which can affect the individual tax rate. Your employer deducts the income tax on your gross salary directly to the tax office every month.
Let’s say your full-time employment was reduced by 50%, i.e., you only have to tax half of the salary. For illustration, let’s assume that your tax rate is 10%. This is the percentage that your employer pays to the tax office in advance every month. And this is exactly where it can go wrong, as the officials take into account your annual income, which not only consists of 50% of your salary, but also from the short-time allowance, which increases the rate to 12%. This in turn means only one thing – a surcharge.
Conversely, if your employer pays in too much, you can expect a tax refund from Germany at the end of the year.
Where is the short-time allowance entered in the tax return?
If you received a short-time allowance of more than 410 € per year, you must state this in line 28 of your tax return (Annex N) . Since it is not difficult to make mistakes in the tax return, we recommend you use our. Da es nicht schwer ist, Fehler in der Steuererklärung zu machen, empfehlen wir Dir, unsere application Taxando for the tax return.
With the help of the tool you will immediately know whether you are entitled to a tax refund from Germany or if you have to make additional payments. The entry of the surcharge is made in field 15 (wage tax certificate).
If you choose the PREMIUM package , you can hand over all formalities to an experienced tax consultant . Fast and secure – that’s how it works with Taxando!5. Schnell und sicher – so geht’s mit Taxando!5
Maciej Szewczyk
He gained experience as a consultant on IT projects for many international companies. In 2017, he founded the startup taxando GmbH, where he developed the innovative tax app Taxando, which simplifies the filing of annual tax returns.
Maciej Szewczyk combines technological expertise with in-depth knowledge of tax regulations, making him an expert in his field. In his private life, he is a happy husband and father and lives with his family in Berlin.
