In this article, you will learn how to set up and manage the annual wage tax adjustment in Personio Payroll.

What is the annual adjustment of income tax?

The annual adjustment of income tax (abbreviated: LStJA) is a legally prescribed process in which it is checked at the end of the year whether employees have paid too much or too little wage tax. With Personio Payroll, you can easily configure and automate this process.

Further information on the theme annual adjustment of income tax in general can be found in ourArticles on the theme.

Setting up the LStYes

Establishment at company level

In the area Payroll accounting > manage > annual adjustment of wage tax, you can set the default Settings for the LStJA at the company level. You have the following options:

• Exclude all employees
• Only include employees who are entitled to reimbursement
• Only employees with a claim for reimbursement or additional payment up to max. 100 € include: 
• Only include employees who are entitled to reimbursement or additional payment below an individual threshold

These options allow you to adapt the annual wage tax adjustment to the individual requirements of your legal entity. To set up the LStJA in Personio Payroll, follow these steps:

1. Navigate to Payroll accounting > manage > annual adjustment of wage tax.
2. Choose the option you want for your legal entity.
3. If necessary, adjust the Settings for individual employees in the respective Employee profile > Personal info > taxes at.
4. Save your details.

Staff-level setup

In each employee profile > Personal info > taxes you can also make custom Settings for the LStJA. You can choose from:

• Include
• Exclude
• Only include if a reimbursement is made

This allows you to respond flexibly to the special tax situations of individual employees. To learn how to update employee attributes, see theHelp center articles on the topic.

Performing the LStJA

After you have made your individual Settings for the LStJA, you do not need to do anything else. The settlement will be carried out automatically in Personio in December with the release of the payroll accounting, if all requirements are met.

The LStJA in payroll documents

Please note:
If you have set up the Settings for the LStJA, information and calculations for the LStJA are displayed in Documents of the December Statement. The Documents payroll account and gross-net report already reflect information on the LStJA after the Settings has been established. 

The following Documents contain information on the annual adjustment of income tax: