What information must employees provide?
Income: This section records the information that employees must enter in Form N. This applies to employees, workers, civil servants, and company pensioners. Please enter the data from your income tax statement here.
Expenditure: In the expenditure section, you can claim your work-related expenses. These include, for example, expenses for a home office, travel costs, and training costs.
For married couples, two separate sections for income and expenditure are automatically created.
What information must employees provide?
Which income as an employee must I declare in the tax return?
Income with payslip
Employees must provide their employer with the electronic wage tax deduction features (ELStAM). These determine the monthly wage tax deduction by the employer. This rule also applies to individuals receiving a company pension from a direct commitment or support fund from their former employer. The same applies to civil service pensions.
All payments made are recorded by the employer on the so-called payslip. Additionally, these data are electronically transmitted by the employer to the tax office, so all details of the payslip (including the wage tax already paid in advance and social contributions) are already available to the tax office.
Nevertheless, you must enter all amounts from the payslip in Form N of the tax return.
Other income from employment
In addition to the income shown on your employer's payslip, you must of course also declare all other income from employment in your tax return. Some of this income is subject to the so-called progression clause.
You must provide information on the following income in Form N:
- Income as a cross-border commuter to Austria, France or Switzerland (please also refer to Form N-Gre),
- Income from employment abroad that is tax-free (under double taxation agreements or the foreign employment decree) (please also refer to Form N-AUS),
- Tax-free expense allowances: These are only taxable if they exceed the trainer allowance of 3.000 Euro, the volunteer allowance of 840 Euro, the carer allowance of 3.000 Euro or the allowance of 3.000 Euro for voluntary activities in the public sector.
- Wages without tax deduction: This mainly concerns wages from a foreign employer that are taxable in Germany, as well as wage payments from third parties. Voluntary tips are not included. Income without tax deduction may be eligible for hardship relief if they do not exceed 820 Euro.
Capital-forming benefits
You can also use Lohnsteuer kompakt to apply for the employee savings bonus if your employer has granted you capital-forming benefits.
Which income as an employee must I declare in the tax return?
Who receives the inflation adjustment bonus?
If employers grant their employees an inflation bonus (inflation, inflation rate, rate of price increase), this is tax and social security-free up to an amount of 3,000 Euro. The condition for tax exemption is that the benefit is granted in addition to the salary already owed. The regulation applies to payments made between 26.10.2022 and 31.12.2024 (§ 3 No. 11c EStG).
Naturally, new regulations often raise questions, such as whether the payment of an inflation bonus is mandatory for employers. And, if it is paid, whether employers must distribute it equally to all employees of the company. The answer to the first question is "No, there is no obligation". The second question was answered by Parliamentary State Secretary Katja Hessel following an inquiry by Member of Parliament Fritz Güntzler (CDU/CSU) as follows:
"The tax exemption for the inflation bonus decided with § 3 No. 11 EStG does not include a regulation that the bonus must be paid to all employees. It is also a tax allowance that can be paid to employees in instalments within the benefit period" (Bundestag document 20/3987 of 14.10.2022).
Even though both the basic payment of the inflation bonus and any distribution among employees are at the employer's discretion for tax purposes, different practices may arise from collective or employment law. Employers may not arbitrarily favour certain employees or disadvantage others. If not all employees receive a bonus or if it is paid in varying amounts, there must be objective reasons for the different treatment. Otherwise, the principle of equal treatment applies under employment law.
Information on the inflation bonus can be found in the official Q&A catalogue of the Federal Ministry of Finance.
Who receives the inflation adjustment bonus?
