Thursday March 11th 2021
Employees are threatened with additional payment
Short-time work brings the state in billions in taxes
Many employees and employers can only save themselves from the pandemic through short-time working. The catch could, however, come with the tax return: Millions of those affected are threatened with a noticeable additional payment.
Employees on short-time work are threatened with additional tax claims, even though the short-time allowance itself is tax-free. As the federal government announced in response to a request from the left in the Bundestag, the tax authorities will collect 1.6 billion euros for the 2020 tax year through the so-called progression proviso for short-time work benefits. The answer is available from the German Press Agency in Berlin. This reservation means that the short-time work allowance increases the tax rate for the regular wages and other income of the employees.
Short-time work should also be at the center of a joint appearance by Federal Labor Minister Hubertus Heil and the Chairman of the Federal Employment Agency, Detlef Scheele. Both want to take stock of "One year Corona" in terms of labor market policy. According to Scheele, short-time working secures employment on a large scale and prevents unemployment. Between February 1 and 24, the Federal Agency received short-time work notifications for 500,000 people. In December, 2.39 million people were paid short-time work benefits.
The peak was reached in April last year with almost six million people. Last year, it had been discussed for months whether the so-called progression proviso for short-time work benefits should be suspended for 2020. That this did not happen was justified in the coalition with the justice to other workers.
Several hundred euros per person
Left-wing MP Sabine Zimmermann assumes that short-time workers face additional tax claims of several hundred euros per person. The progression proviso also applies to unemployment benefits. However, the federal government was unable to provide any information on the associated additional tax revenue. Zimmermann criticized: "Anyone who receives short-time allowance has already suffered a significant loss of income." Zimmermann said that it could not be explained to anyone that there is now a risk of additional tax claims.
She called for the progression proviso for short-time work benefits to be abolished. The Federal Ministry of Finance points out that drawing short-time allowance does not automatically lead to additional tax payments. That depends, for example, on the tax class, the wage tax deductions before Corona or any other income. "If almost exclusively tax-free short-time work benefits are received that are subject to the progression proviso, there is no tax to be assessed.
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