How do you correctly enter employee shares from the USA?
If you have received shares from your US employer as part of an employee programme, you must declare this benefit in your German tax return. In this article, we will explain step by step how to do this easily with Lohnsteuer kompakt – and how to avoid paying double tax.
When are the shares taxable?
If shares are not transferred to you immediately but only after a certain waiting period (known as the vesting period), they are considered to have been "received". From this point on, they belong to you and are considered additional wages in Germany – like a salary in the form of shares.
The value of the shares at the time of transfer must be declared in the tax return and is taxable in Germany. In many cases, your US employer has already withheld taxes on this share value. You can have these US taxes credited in Germany to avoid double taxation.
How to record employee shares in Lohnsteuer kompakt
Enter wages without tax deduction
In Lohnsteuer kompakt, navigate to:
"Income from employment" → "Other income" → "Wages without tax deduction"
Enter the full market value of the transferred shares there – e.g. 20.000 Euro.
Credit foreign tax
Go to:
"Foreign income" → "Creditable foreign taxes"
Add the following information:
- Country of origin: USA
- Income: 20.000 Euro
- Creditable tax: e.g. 10.000 Euro, if verifiable
The tax office will then check whether and to what extent the US tax can be offset against your German tax.
Additional information for the tax office (recommended)
It is best to supplement your tax return with a brief explanation in the "Message to the tax office" section.
Example: As part of my US employer's employee share programme, shares with a total value of 20.000 Euro were transferred to me in 2024. Of this, 50% (10.000 Euro) was withheld as a flat-rate tax. I apply for the crediting of this foreign tax in accordance with the Germany–USA DTA.
Submit documents (recommended)
Submit documents from your employer or broker with your tax return showing the market value of the transferred shares and the amount of foreign tax withheld. Although it is not mandatory to provide this evidence, it is recommended to avoid queries from the tax office and to clearly demonstrate the crediting of the foreign tax.
Tip: After submitting the tax return, you have the option to submit the documents electronically with Lohnsteuer kompakt.
What applies when selling the shares later?
If you sell the shares later and make a profit, you must pay tax on this profit in Germany. This is called capital gains tax. The value the shares had when received (e.g. 20.000 Euro) is considered the "starting value". Only the profit above this must be taxed.
Example: You sell the shares later for 25.000 Euro. Since the purchase value is 20.000 Euro, only 5.000 Euro must be taxed.
How do you correctly enter employee shares from the USA?
Tax relief for volunteers in vaccination and test centres
Voluntary helpers in vaccination and test centres were already able to benefit from tax relief in the years 2020 to 2022, and these regulations also apply for 2023.
The regulations are uniform across Germany and concern the trainer's allowance and volunteer allowance. Helpers directly involved in vaccinations or tests can use the trainer's allowance, while the volunteer allowance applies to those working in administration or organisation.
It is important to note that the tax relief only applies if the employer is a charitable organisation or a public employer, not for doctors' surgeries or private test centres.
The trainer's and volunteer allowances only apply to part-time activities, which usually take up less than one third of the working hours of a full-time position or have a weekly working time of a maximum of 14 hours. These allowances are annual amounts and cannot be prorated.
Doctors' surgeries are excluded from these regulations. If doctors pay employees a bonus for the additional work, the trainer's or volunteer allowance cannot be used for this.
The allowances of 3,000 Euro or 840 Euro can also be taken into account by the employer when calculating income tax. In this case, the employee must confirm in writing to the employer that the respective allowance has not already been "used up" elsewhere.
Tax relief for volunteers in vaccination and test centres
Which tax-free expense allowances do I need to declare?
If you have received tax-free expense allowances, please enter them here. This includes allowances received from public funds, a federal or state fund.
Employees often receive a tax-free expense allowance from part-time work. This could be as an instructor, educator, trainer in the sports sector or as an artist such as a choir director or musician, and also as a carer for sick, elderly or disabled people. It must be an educational or caregiving activity.
Payments for such eligible part-time work are tax and social security-free up to 3.000 Euro. The condition for the tax benefit is that the activity is carried out part-time, for a charitable organisation or a legal entity under public law, and serves charitable, benevolent or religious purposes.
The allowance of 3.000 Euro is granted only once per person, even if you have several eligible activities. It is therefore personal and not activity-based. The allowance is an annual amount. Therefore, payments up to the maximum amount remain tax-free even if you do not carry out the eligible activity for the entire year.
As a supporter of such an organisation, you can receive part or all of your expense allowance tax-free. However, any amounts exceeding the allowance of 3.000 Euro must be taxed. If your expense allowance is less than 3.000 Euro, you can only claim the lower amount.
Ms Meier teaches at a music school and receives 2.800 Euro annually for this. She also supervises a gymnastics group at the primary school and receives another 400 Euro per year for this. Both activities are tax-privileged under § 3 No. 26 EStG, but only up to a total of 3.000 Euro. Ms Meier must tax the remaining 200 Euro.
Which tax-free expense allowances do I need to declare?
When should I declare income as a cross-border commuter?
If you live in a border area and commute daily to work in a neighbouring country, you are a so-called cross-border commuter. Regarding your income, the following applies in most neighbouring countries: you must pay tax on your salary in the country where you work; the income remains tax-free in the country where you live. However, your foreign income is included in the progression clause and thus increases the tax rate for your other income.
The information must be provided in "Form N" and "Form N-AUS" or Form N-Gre. Form N-Gre concerns foreign income from employment for cross-border commuters from Baden-Württemberg to Austria, Switzerland, and France.
If you are single, work as a cross-border commuter, and have no additional income in Germany, you do not need to worry about the progression clause in Germany.
Exceptions: For France, Austria, and Switzerland, a special cross-border commuter regulation applies under the respective double taxation agreement.
If you work in France or Austria, you do not have to pay taxes there but must declare the wages in your German tax return and pay tax as normal. Civil servants or public sector employees, however, pay tax on their income in the country where they work, as the principle of the paying state applies.
If you work as a cross-border commuter in Switzerland, your employer may deduct a wage tax of 4.5 percent, which is credited against the tax in Germany. If you are a civil servant or public sector employee, you must pay tax on your income entirely in Germany.
Please note that during the coronavirus period, there were special regulations for cross-border commuters, as many employees worked from home and did not commute daily (see also: Double taxation agreements and other agreements in the tax sector). In addition, double taxation agreements are now being amended, or so-called amendment protocols have been agreed, whereby home office days are increasingly considered harmless. In individual cases, it should therefore be carefully checked where the right of taxation lies.
When should I declare income as a cross-border commuter?
What is the "Special Cross-Border Commuter Regulation"?
These regulations apply to commuters who live in Germany and commute to work in France, Austria, or Switzerland. This is governed by the respective double taxation agreements. If you work in one of these countries, you must pay tax on your income in Germany, not in the country where you work. However, this only applies if your place of residence and work is in the border zone of the respective country. For France, the border zone is 20 km on either side of the border, for Austria it is 30 km. In Switzerland, there is no such border zone.
There was also a special cross-border commuter regulation with Belgium until 2003. However, since 2004, the general regulation has applied. This means for cross-border commuters to Belgium: The salary is no longer taxed in the country of residence, Germany, but in the country of employment, Belgium. In Germany, the income is exempt from tax but included in the calculation of the tax rate. However, there is a special tax regulation for commuters from Belgium to Germany: Belgium, as the country of residence, exempts the wages taxed in Germany as the country of employment and only includes them in the calculation of the tax rate. However, this income is included in the Belgian municipal tax, which is an additional tax on income tax. To offset this Belgian municipal tax, German income and wage tax on this income is reduced by a flat rate of 8%.
What is the "Special Cross-Border Commuter Regulation"?
Who receives wages without tax deduction?
In the tax return, you must also enter wages in "Anlage N" from which no income tax was deducted. This may apply to wages from a foreign employer that are taxable in Germany, as well as wages paid by third parties where the employer was not obliged to deduct income tax.
Such income without tax deduction may be eligible for hardship relief if it does not exceed 820 Euro.
Important: You do not need to enter a part-time job here. For this employment, the employer pays flat-rate taxes and social security contributions. The part-time employee does not pay any taxes or insurance contributions. You do not need to declare the income from the part-time job in the tax return.
However, it is also possible for the part-time job to be taxed monthly according to income tax details (ELStAM). In this case, the part-time job must also be declared in the income tax return under “Employees > Income tax statements”. Your employer must provide you with an income tax statement in this case.
Who receives wages without tax deduction?
Do I need to declare my part-time job in my income tax return?
A mini job is defined as employment where the monthly wage does not regularly exceed 538 Euro. The period for determining the regular monthly wage is a maximum of 12 months.
Taxes and Social Security
In a mini job, the employer pays flat-rate taxes and social security contributions. The employee does not pay any taxes or insurance contributions.
Tax Return
A mini job usually does not need to be declared in the tax return. However, an exception applies if the employer does not opt for the flat-rate income tax. In this case, the employee receives a payslip and must enter the relevant data in their income tax return.
Minimum Wage Adjustment
As of 1 January 2025, the minimum wage is set to rise to 12.82 Euro per hour. This will increase the mini job limit to 556 Euro (2025).
The earnings limit for mini jobs can be exceeded a maximum of twice within a calendar year. Exceeding the limit is only permitted for up to two months within a year and must not exceed a total of 6,456 Euro (or in exceptional cases up to 7,532 Euro) per year.
Do I need to declare my part-time job in my income tax return?
