General

What is the payroll tax return?

The employer submits the income tax return to the relevant tax office at regular intervals for each of the organization's permanent establishments subject to income tax. Both the withheld and the flat-rate income tax are reported, regardless of whether income tax was actually incurred.

The obligation to submit returns exists as long as employees are employed at the permanent establishment, income tax is to be withheld and paid, and this has been reported to the tax office.

Please note:
Exemption from payroll tax registration is possible if only employees subject to flat-rate taxation of 2% are employed, whose tax is paid directly to the mini-job center.

Jurisdiction of the local tax office

The tax office responsible for the place of business is the tax office in whose jurisdiction the organization's place of business for income tax purposes is located. The employer must sign up for each of these permanent establishments and pay the amounts withheld. 

For income tax purposes, a permanent establishment is defined as any organization or part of an organization in which the wages relevant for income tax deduction are determined. 

This means that either all relevant wage components are compiled there or all input values required for wage tax deduction are summarized. 

Procedure and special features of the wage tax return

Submission of income tax returns

The wage tax return is generally submitted to the tax office via electronic data transfer in accordance with Section 41a (1) sentences 2 and 3 of the Income Tax Act (EStG) using a prescribed data record. Signing up using the official paper form is only possible in exceptional cases and upon application to the tax office. 

The data can be transferred by the employer themselves or by a tax advisor. A certificate is required for electronic transmission, which is issued after registration on the ElsterOnline portal. Authentication is mandatory in this process. Once registered data transmitters, such as tax advisors or payroll offices, can use a certificate to process sign-ups for all clients.

Tip:
For more information on registration, please visit www.elsteronline.de

Even if no income tax was incurred during the registration period, a so-called zero report must be submitted to inform the tax office.

The tax actually withheld at the time of payment is always decisive for the income tax reported. If the remuneration is not paid until the following month, the registration date will also be postponed accordingly.

Contents of the wage tax certificate

The income tax amounts must be clearly broken down in the registration form according to the calendar year in which they were received. This allows the tax office to assign the reported amounts to the respective employee's income tax certificates. Income tax, church tax, and solidarity surcharge must be broken down separately for the previous year, the current year, and the following year. 

Flat-rate income tax must be reported separately in the tax return. In the case of flat-rate taxation of employees, only the flat-rate income tax at the applicable tax rate (e.g., 20%) must be reported and paid. Flat-rate taxes for gifts (e.g., 30% according to Section 37b of the Income Tax Act) must also be reported separately. 

Please note:
For low-paid employees with a flat tax rate of 2%, income tax is signed up and paid directly through the Minijob-Zentrale (mini-job center). It is not necessary to register for income tax with the tax office. 

If income tax is calculated on a flat-rate basis, church tax must also be calculated on a flat-rate basis. This is entered in the corresponding line on the registration form and distributed by the tax office to the respective religious communities. 

Correction of income tax return

If, after submitting the wage tax return, the employer discovers that incorrect information has been provided, a corrected wage tax return must be submitted to the tax office responsible for the place of business. This must be indicated with a "1" in indicator 10 of the sign-up.

All information for the relevant period shall be included in the corrected application. This also includes the uncorrected amounts. It is not possible to transmit only the differences or only the corrected values. 

Amendments for the previous year must not be made via the actual income tax return, but must be marked as a "corrected return" in the return for the respective previous year. 

Registration deadlines and submission periods

FAQ

How is the registration period for income tax determined if the organization or permanent establishment did not exist for the entire previous year?

In this case, the income tax withheld in the previous calendar year is extrapolated to an annual amount in accordance with Section 41a (2) sentence 3 of the Income Tax Act (EStG). 

How is the registration period for income tax determined if the organization or permanent establishment did not yet exist in the previous year?

In this case, according to Section 41a (2) sentence 4 of the German Income Tax Act (EStG), the wage tax paid for the first full calendar month after opening the account is decisive. This is extrapolated to an annual amount, thereby determining the registration period.