(2023) 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 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 allowance for trainers 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.