Wage tax certificate

What is an income tax certificate?

With the help of the wage tax certificate, the employee can see which ancillary wage costs, e.g. wage tax or social insurance, the employer actually deducts from the employee’s salary. The certificate serves as proof to the tax authorities. The wage tax certificate is an important document for the employee for the tax return.

By when must the employee’s wage tax statement be provided?

The employee is usually provided with the wage tax statement, also known as the LSB, once a year after the end of a calendar year. This must be done by the last day of February in the following year at the latest. It has replaced the income tax card since 2013.

What is an income tax certificate needed for?

Employees need the income tax certificate for their income tax return and possibly also as proof for banks or tax authorities.

In addition to income, other financial information such as allowances, tax classes or tax characteristics can also be seen in the income tax statement. This can also be important information for financial decisions.

Income tax card replaced by income tax statement

Originally, the paper income tax card was used to document social security contributions. Since 2013, this information has been stored and transmitted with the electronic income tax card.

The employer withholds income tax from the gross wage and only pays the net wage to the employee.

The electronic income tax card contains the electronic income tax deduction features, also known as ELStAM. These include marital status, number of children and religious affiliation. This ELStAM information can also be found on the income tax statement.

Contents of an income tax certificate

The income tax certificate contains a lot of information that is important for your tax return. For a better understanding, we will now explain all the information and components in detail:

The left-hand side of the income tax statement

• The name and address of the employee:in
• eTIN The electronic transfer identification number, which is important for data exchange and reconciliation with the tax office.
• The personnel number from the employer:in
• The employee’s date of birth:in which is important for calculating tax and social security contributions.
• The tax class of employees:in
• Tax identification number
• Personnel number from the personnel department
• The child tax-free allowances are based on the number of children for whom you are entitled to child benefit.
• The income tax allowances These can be deposited in defined cases on application and reduce the amount of tax.
• The church tax features that are withheld depending on religious affiliation
• Address & tax number of the employer:in

Please note: In the case of a mini-job, no wage tax certificate is usually issued, as there are no social security contributions and wage tax.

The right-hand side of the income tax statement

This section contains the corresponding allowances and deductions that must then be stated in the tax return. For a better overview, there is a numbering system to make it easier to find your way around the tax forms later.

1. Certification period: The period of employment of the employees:in.
2. Periods without entitlement to wages: Number of days on which there was no entitlement to wages for more than five consecutive working days.
3. The gross taxable salary including benefits in kind
4. The withheld wage tax
5. The solidarity surcharge withheld
6. The church tax withheld
7. Withheld church tax of the spouse/life partner (in case of denominational difference)
8. Pension benefits included in the gross salary (3): E.g. company pension scheme.
9. Pension payments taxed at a reduced rate for several calendar years
10. Reduced taxed wages for several calendar years and reduced taxed compensation: E.g. severance payments or anniversary bonuses
11. Withheld wage tax of 9 and 10
12. Retained solidarity surcharge of 9 and 10
13. Employee’s church tax withheld from 9 and 10
14. Withheld church tax of the spouse/partner of 9 and 10
15. (Seasonal) short-time working allowance, maternity allowance etc. e.g: Short-time working allowance, maternity allowance, allowance in the event of a ban on employment for the period before or after childbirth and much more.
16. Tax-exempt wages: Income from employment abroad that is exempt from wage tax under either the double tax treaty (16a) or the foreign employment decree (16b).
17. Tax-free employer benefits that can be offset against the commuting allowance: Allowance or payment for commuting to work.
18. Employer benefits taxed at a flat rate for travel between home and primary place of work: e.g. commuting allowance taxed at a flat rate of 15%.
19. Taxable compensation and wages for several calendar years that were not taxed at a reduced rate (included in 3)
20. Tax-free meal allowances for away-from-home activities e.g. for away-from-home activities
21. Tax-free employer benefits for double housekeeping: e.g. travel costs, additional meal expenses, expenses for the second home and relocation costs.
22. Employer’s contribution/subsidy: The employer’s contribution +to the statutory pension insurance.
23. Employee contribution: This is the employee contribution to the statutory pension insurance.
24. Tax-free employer contributions: e.g. from employee contributions to statutory health insurance (a), private health insurance (b) or statutory long-term care insurance (c).
25. Employee contributions to statutory health insurance
26. Employee contributions to social long-term care insurance
27. Employee contributions to unemployment insurance
28. Contributions to compulsory private health and long-term care insurance or minimum lump-sum provision
29. Assessment basis for the pension allowance at 8
30. Relevant calendar year of the start of supply for 8 and / or 9
31. Re 8 for payment during the year: first and last month for which pension payments are made
32. Death benefits, lump-sum payments / settlements and back payments of pension benefits – included in 3 and 8: e.g. death benefits
33. Child benefit paid out
34. DTA Turkey allowance: The double taxation agreement is intended to prevent persons with income in both countries from being taxed twice. The employers:in deposited here the tax-free amount of pension payments.

When will you receive the certificate?

The income tax statement is sent by the employer to the employee from December until February of the following year at the latest. If no document is available by then, it makes sense to ask for one. There is usually also a monthly payslip, but this is only a supplement to the final wage tax statement.

If there has been a change of employer, the old employer may send the certificate to the former employee beforehand.

If someone has received unemployment benefit, they will receive their income tax statement from the employment office. This usually arrives by the end of February and it does not matter whether the person has received unemployment benefit for one month or 12 months.

What do the capital letters in the second line mean?

Capital letters in line 2 are a coding that we will explain in the following paragraphs:

• U → Payment of wages was interrupted for at least 5 consecutive days, e.g. due to sickness or parental allowance.
• F → Tax-free collective transportation was carried out at the first place of work.
• M →In the caseof an external activity, the employee was provided with meals.
• S → Is filed when an employer calculates wage tax from other remuneration. Wages from other employment relationships in this period are not taken into account.
• FR → Only available from 2017. Relevant for French cross-border commuters who do not have income tax deducted.

Who receives an income tax certificate?

Wage tax certificates must be issued for all employees subject to social security contributions.

Employees in a mini-job employment relationship are an exception. A certificate does not have to be issued here if the employment is taxed at a flat rate. In this case, the employee no longer has to declare this in their tax return.

Lost or incorrect income tax statement?

If you have not received the certificate or it has even been lost, it is advisable to simply ask your employer’s HR department. If there are any errors, you should discuss them with your employer and make a note of them in your tax return.

Errors reported to the tax office must be proven. The certificate serves you and the tax office only as a guide for the tax return. However, only the tax return itself and the subsequent tax assessment notice are legally binding.

How long must an income tax certificate be kept?

From the employee’s point of view, the income tax statement is the annual financial statement. Ideally, this certificate should be kept until retirement, as it is also the basis for calculating the pension. In order to be able to dispute an insufficient pension entitlement at a later date, it is therefore advisable to keep this certificate as evidence.

Also very important as evidence

It is advisable to carefully file and keep the wage tax certificates and tax assessment notices. They can serve as proof of the following:

• Application for parental allowance
• Caring for relatives
• Kindergarten place
• BAföG application of the child
• Other applications