The special payments due in April and October are taxed after deduction of the contribution for health insurance in the same way as the other remuneration (holiday and Christmas bonus) for an active employee.
Both pensions from statutory social insurance (e.g. from the Pension Insurance Institution for Workers, Employees, Farmers or the Commercial Economy) and pensions from the Federation or the Länder are income from employment. They are subject to income tax.
The wage tax on the current pension is withheld by the pension paying agency and calculated according to the income tax rate.
If you receive several pensions from the statutory social insurance , a civil servant's pension, a pension from a previous employment relationship with a federal state or pensions from domestic pension funds, these pensions are taxed jointly.
Joint taxation is carried out by the body that pays out the highest taxable income.
If you receive a company pension in addition to the statutory pension, then there is no mandatory joint taxation. In this case, you must carry out an employee assessment after the end of the calendar year.
For salaries that have not been taxed jointly, each payer or pension payer calculates wage tax only on the emoluments it pays. As a result, too little wage tax is paid overall.
In the case of employee assessment, the pensions are added together and taxed as if the multiple pensioner had received the total amount as a single pension. This ensures that someone with multiple pensions is taxed in the same way as someone who receives the same amount from just one pension.
If your additional payment is more than € 300, there may also be an advance payment.
In these cases, the back payment for the previous year and the advance payment for the current year may exceptionally coincide in one year. The advance payments save you any additional payments for the current year.
ATTENTION: The care allowance and the compensatory allowance will always remain tax-free.
Pensioners are entitled to a pensioner tax credit, which is automatically taken into account by the pension-paying body. For pension income of up to € 20,233 per year, the pensioner tax credit is € 954. For pension income between € 20,233 and € 29,482, it is reduced to zero. The annual pension income is calculated by deducting the compulsory social security contributions from the gross pension.
If you are entitled to the (increased) pensioner tax credit and this results in negative income tax, you can claim a social security refund as part of the employee assessment .
As a pensioner, you are entitled to the single earner tax credit or the single parent tax credit under certain conditions.
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Trade union vida Department of Pensioners