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Income tax certificate: definition, content and practical tips
Once a year, employers have to send the income tax certificate for their employees subject to social insurance to the tax office and send employees a printout of the data. In this article you will find out what information should be included in the income tax certificate and what you should know about handling the document.
All wage documents in one place: Personio's digital personnel file. Find out more about the function here!
What is the income tax certificate?
The electronic income tax certificate shows which income tax deductions the employer has actually made from the salary of its employees. The document serves as proof to the tax authorities. In addition to tax deductions and social security contributions, the income tax certificate contains further information on allowances, tax class and tax characteristics. Employees can use these for their tax returns.
Before 2013, paper wage tax cards were used. Since then, processing has been completely digital. The tax authorities have introduced the electronic income tax deduction characteristics (ELSTAM) for this purpose, which are stored in a central database. The ELSTAM contain the data that used to be on the front of the paper card.
Companies can call up all ELSTAM relevant for the wage deduction from the database by stating the employee's date of birth and tax ID. Once a calendar year, they digitally transmit the data on the gross deductions made to the tax authorities' database. You give your employees a printout of the electronic income tax certificate.
A major advantage of the digital process: employees do not have to separately notify their employer of any tax-relevant changes - such as marriage, leaving the church or changes in child allowances. A message to the responsible reporting or tax authority is sufficient. These automatically record the changes in ELSTAM so that the employer always pays the correct wage tax.
How do employees get the income tax certificate?
Employers must submit the data for the electronic income tax certificate to the tax office by the last day of February in the following year at the latest. Therefore, employees usually receive their income tax certificate together with the pay slip for February, but often as early as December or January. And in the same way as the monthly statements - digitally or in paper form.
If an employment relationship ends in the middle of the year, many companies send the ex-employees the income tax certificate shortly after their contract ends.
If employees have been unemployed for one or more months and have received unemployment benefit, they will receive an income tax certificate from their responsible employment office for this period. If you do not receive this by the end of February of the following year, you should request the document in writing from your local employment office.
Manage income tax statements online
In Personio, income tax certificates are automatically saved in the employees' digital personnel files - and can be downloaded by them at any time.
What information is on the income tax certificate?
The printout of the electronic income tax certificate contains various information on income, employment relationships and personal tax characteristics.
In addition to the gross wage and wage tax, the following are usually stated:
- Tax identification number
- Tax class
- Information on church tax
- Child allowances
- Income tax allowance
- Solidarity surcharge
- Contributions to statutory and private health and long-term care insurance
- employee contributions to unemployment insurance
- Employer and employee contribution to the statutory and professional pension insurance
More rarely or depending on the individual case, the following fields are also filled out:
- Short-time allowance
- Interruption periods without a salary entitlement
- Meal allowances
- Employer benefits for external work and double housekeeping
Some terms are not immediately obvious to laypeople, but contain important information.
Form for the electronic income tax certificate 2021
What is the annual additional amount?
This amount is relevant for people who do multiple jobs and still have a low income. This means you pay less tax. How does this work?
If you do not use your income tax allowance in the first job, you can transfer the remaining allowance to the second job. For this you would otherwise have to pay wage tax from the first euro, as it is always assessed with tax class 6. As a result of the transfer, the wage tax is only due when the annual additional amount is exceeded.
What are the pension allowance and pension payments?
Pension payments are income similar to pensions. Retired civil servants receive it from the state, but also survivors, severely disabled people who have reached a certain age limit or people who are unable to work or work.
The pension payments are subject to tax and social security contributions, with the exception of the pension allowance. The exemption is calculated as a percentage and in accordance with Section 19 of the Income Tax Act.
What is the eTIN?
The eTIN is a 14-digit electronic transfer identification number made up of capital letters and numbers that allows the tax office to correctly assign the data transmitted by the employer. The eTIN is only an interim solution as long as no tax identification number has been assigned to the employee or the employer does not (yet) have it.
When does the "reduced taxed wages for multi-year jobs" apply?
Some jobs extend over more than two tax years, but are paid bundled in one year. If these jobs also last at least twelve months, the so-called fifth rule can be applied in such cases. The wages are taxed as if they had accrued evenly over five years in order to avoid a one-off high tax burden. A typical example of the application of the one-fifth rule is severance pay.
Does every employee get an income tax certificate?
Employers must issue income tax certificates for all employees who are subject to social security contributions.
Employees in mini jobs do not receive a wage tax certificate for their work if the employer pays a flat rate tax on the marginal part of the job. The employees then do not have to declare this activity in their tax return.
Where can employees request the income tax certificate?
As a rule, the HR department sends out the income tax certificates at the end of the calendar year, at the latest in February. In order to minimize the effort, it is advisable to send them together with the monthly pay slip.
It is easier for companies that use modern HR software with employee self-services. You can provide your employees with the completed wage tax certificates digitally. The employees log in with their access data and can download and print out their documents at any time.
Request an income tax certificate online
In Personio, employees can download personal documents themselves, manage their data and submit applications. A simple process for HR and employees: inside.
What do employees need their income tax certificate for?
Anyone who is employed and filing their income tax return needs the information on the income tax certificate in order to fill out the tax return form correctly.
The information alone is sufficient to enter all legally required information. Employees who would like to receive the greatest possible tax refund should, however, also claim income-related expenses or employee lump sum.
What happens if the income tax certificate is incorrect?
If employees discover an error in the income tax certificate, they should contact the HR department and discuss this. Employers cannot retransmit incorrectly transmitted income tax data, but they can contact the tax office. The tax office then takes care of the necessary corrections.
The income tax certificate itself is not legally binding anyway. Employees therefore do not need a corrected version, but simply submit the correct data in their tax return. Only the tax assessment is legally binding.
How long must the income tax certificate be kept?
Employees should keep their electronic income tax notices at least until they retire. Because they might need the documents to calculate the pension or to contest incorrect pension calculations. But the notifications can also be important earlier: for example, for the application for parental allowance, for a child's student loan application or for proof of the care of relatives.
Employers are legally obliged to keep wage tax assessments for ten years.
What should employees do if they have lost their income tax certificate?
If employees have lost or misplaced their income tax certificate, they can request it again from their employer. This has to archive them for ten years because of the legal retention requirements. Older documents can also be obtained from former employers in this way.
If the current employer offers digital employee self-services, employees usually do not have to request old certificates from the HR department. Older documents are also available for download in the online accounts of the individual employees.
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