With savings plan payments, your employer supports you in saving and pays monthly into your savings plan. Under certain conditions, you can even receive state subsidies that are tax-free.
What are savings plan payments (Vermögenswirksame Leistungen)?
Savings plan payments are voluntary additional payments made by an employer on top of your salary. The idea is that employees with lower incomes in particular get a helping hand to build up assets.
How do I receive savings plan payments?
In many professions, savings plan payments are regulated by collective agreements. But even in the case of non-tariff contracts, many employers have now opted for this payment to their employees.
In order to receive the additional payments from the employer, the employee selects a savings contract that is financed with employer payments. The cash benefit from the employer flows directly into the savings plan. There are countless providers of savings plans with different investment models. A distinction is made between financial investments and home loan and savings contracts.
How high are the payments?
The minimum limit for the payments is 6.65 euros per month, the maximum amount is 40 euros per month. If you find a particularly interesting offer with an investment amount that exceeds what your boss is willing to pay, you can pay the remaining amount from your salary.
Payments also after a change of jobs
If you change jobs, you can continue the savings plan with the new company. If your new employer does not want to participate, you can continue to pay the savings contributions out of your own pocket or even set the current contract to "non-contributory".
Are savings plan payments taxable?
Savings plan payments are considered wages from employment and are therefore taxable. This means that they are added to your salary for tax purposes. So if you receive 2,000 euros gross per month plus 40 euros in benefits, you pay the tax for 2,040 euros per month.
What is the employee savings subsidy (Arbeitnehmer-Sparzulage)?
Savings plan payments are particularly worthwhile if the state supports you in saving. It does this in the form of the so-called employee savings allowance - in other words, the state pays a subsidy towards your savings plan payments. However, not everyone receives this state support.
Who is entitled to the employee savings allowance?
In order to receive the employee savings subsidy, you must fulfil two conditions:
- In order to be eligible for the state subsidy, your income must not exceed 20,000 euros for financial investments (40,000 euros for married couples). In the case of home loan savings, the income limit is only 17,900 euros (35,800 euros for married couples). The income limit only refers to the taxable salary. Your actual gross salary can therefore be higher. The more income-related expenses and special expenses you can claim in your tax return, the smaller the amount that is taken into account for the employee savings subsidy
- The savings contract must have a minimum term of 6 or 7 years. During this time, the amount saved may not be touched
How high is the employee savings allowance?
In the case of financial investments, this is 20% of your payments, up to a maximum of 80 euros per year. In the case of home loan savings, this is 9% of your savings contributions, up to a maximum of 43 euros per year. If you are married and you are assessed together for tax purposes, the double values apply to you.
Are taxes due?
No, unlike the employer's payments, the state’s employee savings allowance is tax-free.
How do I receive the employee savings allowance?
You must reapply for the employee savings allowance every year. To do this, you must submit a tax return and state in it that you have received savings plan payments. If this information is missing, the employee savings allowance will not be taken into account by the tax office.
In addition to the information in the tax return, the provider of the savings plan must also transmit the relevant data electronically to the tax office. The provider needs your consent for this. The provider then automatically sends the required data to your tax office and usually also to you.
Once the tax office has received the relevant information from the provider and you state in your tax return that you have received savings plan payments, the tax office will check your entitlement to the employee savings allowance.
Reference to employee savings allowance in the tax statement?
If the tax statement (Steuerbescheid) from the tax office states that it was not possible to determine the employee savings allowance because the provider did not submit any data, you should contact the provider. In this case, the provider does not mean Taxfix, but the provider of your savings plan.
How to enter savings plan payments in the Taxfix app
In the "Finances" category, you can indicate that you have received savings plan payments.
You do not need to enter any further details, as the contributions are automatically sent to the tax office by the provider of the savings contract. You do not need to enter the type and amount of savings plan payments you receive in the app. With this information, the employee savings subsidy is also automatically calculated and taken into account if there is an entitlement.