At a glance: Important information as of 1 January 2018 relevant for employers

As every year, 2018 has also important changes in the area of wage tax and the social security right. This article lists the most important changes you need to know for your current wage tax billing.

Changes in income tax law

ELStAM-Procedure

• ELStAM-Data are obligatory for the employer
• Increase of the basic tax-free allowance

Travel expenses

• Foreign travel allowances have changed as of 1 January 2018 (attachment: Auslands-pauschalen)
• The rules regarding attestation “M” are extended until the end of 2018
• Benefits in kind values apply, corresponding with those for social insurance purposes for

            breakfast: EUR 1.73
            lunch/dinner: EUR 3.23

            The price for the single meal must not exceed the amount of EUR 60.00.

• Benefits in kind up to EUR 44.00 monthly continue to be income tax-free. If this threshold is exceeded, the entire value of the benefit in kind will be subject to income tax. Flat-rate taxed benefits in kind are not to be included.

Tax relief for company pension shemes (Betriebsrentenstärkungsgesetz)

• Support/encouragement of company pension shemes of small entities and low-income earner
• Increase of wage tax exempt amount from 4 to 8 % of contribution ceiling (but for social insurance matters the rate of 4 % is still valid), in return the additional max. tax exempt amount of EUR 1,800.- is no longer valid
• Employer contribution for low-income earners with a monthly salary of max. EUR 2,200.- (employees including part time workers and marginal employments - with taxable or flat rate taxed salaries) in addition to the salary and min. EUR 240.-

      → Supporting contribution for employer of 30 % of the pension contribution, max. EUR 144.- yearly
      → Employer contribution for low income earner is tax exempt up to EUR 480.- yearly

• Instead of pension guaranty now commitments by employer contribution are possible if social partners are involved

Changes in social insurance law

Contribution rates of social insurance

Social insurance contribution ceilings

Subsidies to the health- and nursing care insurance

• The maximum limit for earnings of persons in marginal employments amounts to monthly EUR 450.00. These “Minijobs” are insured in the statutory pension insurance, an exemption is possible. Marginal and short-term employees are obliged to disclose further marginal and/or short-term employments.
• Temporary employment occurs when employment does not exceed 3 months or 70 days.
• For low-income earners the limit remains unchanged at EUR 325.00. The employer must also bear the surcharge in the nursing care insurance for childless individuals.

Monthly monetary value of benefits in kind

Due date of data transfer of statements of contributions paid and of payments of total social insurance contribution amounts (fixed by law)

• When health insurance companies are charging or raising the additional health insurance rate there is a special right of cancellation. The binding period after a health insurance exchange remains unchanged.

Miscellaneous

• Minimum wage for (almost) all business lines EUR 8.84 (unchanged)

→ take into consideration generally binding collective agreements

• Employment of pensioners

- No more unemployment insurance contributions by the employer (limited until 2021)

• Maternity Protection Law

- More freedom of decisions for women
- Paid suspension will only be relevant if changes of working place or other kind of work are not possible