Hello,
I would like know the tax rules on bonus. As I got the bonus with tax of 46% (Even there is no tax on Health insurance and pension in this 46%).

Does anybody have idea about tax on Bonus? Is there anyway I can get some tax benefits on bonus?

Thanks.

Best Regards,
Alok

Hi Alok,

Are Bonuses like "Weihnachtsgeld" and "Urlaubsgeld" meant here?

-Fred

Fred,
Bonus are preformance based, given at end of one year employment. But I think it would be same rule for Bonus like "Weihnachtsgeld" and "Urlaubsgeld". Do you have any idea for tax rebate on this?

Alok

Yes I do

Simply add the value of the bonus to your brutto salary and go to any salary calculator (I have posted the link ablout three times)

Sorry but this are not good news. You have to pay taxes over your bonus and your bonus will be highly reduced.

Good luck

YO

It is better to start 'Pention plan' from some insurance companies.. so that you can save tax on your bonus.

VSK

VSK,
Thanks for information. How can I save in tax after start pension plan from some insurance company. Can you tell me in detail, what exactly I have do and how much I can save?

I didn't understand why there is so much tax on Bonus (46%) as in class3 (I have to pay 35-36% tax on my montly income, which including pension and health insurance). In bonus even, there is no money goes to health insurance and pension.

If anyone have idea why there is different tax rules in bonus?

Alok

Unfortunately the Tax System is like this in Germany. You will be taxed on your total salary. Doesnt matter bonus, weihnachtsgeld, urlaubsgeld or Overtime.....everything is taxed.
The tax is high becoz the Finanzamt calculates that if in a particular month u get bonus or any sort of extra money..u might be getting that much salary monthly and automatically deducts the tax according to the higher tax bracket.
But normally at the end of the year, ur company calculates total annual salary and compares it with the Tax table..and if u have paid more...u get back in your december salary.

Cheers,
Cape

Hi Agupta,

Unfortunately I didn't remember the % how much we can save on our bonus.. but I have remembered that we can save about 85% tax on bonus... 3 yrs ago I have started this pension plan and paying about 1790 € per year(this is totally tax free amount). So try to consult good insurance company... so depends on tax plans you can save money...

We have many ways to save taxes.. even you can claim house rent for your house in your home land.. Since normally every one will visit their home land atleast once per year.. so you will stay in your home at your home land, but the thing is you should have proper documents that you are paying rent for your house every month like that...

VSK

Hello All,

I heard from aBookkeeping Department (Buchhaltung) person that when it comes to overtime (Überstunden), 72% goes to taxes. As it is money which is "earned without working" (so thinks the finanzamt!), you are taxed to the max. Maybe its the same case when it comes to various bonuses too. And maybe its wiser to invest in such pension plans like what gupta suggested.

Maybe you can list a few more topics which you can show in your tax-statement (steuererklärung) at the end of the year. So that people will start keeping the various receipts (Quittungen/Belege) carefully.

Regards
Fred (fredjeffry at hotmail dot com)

If you have a pension plan, the discounted money will only pay 20 to 25% "pauschal" tax and the rest will go directly to your fund. But there are some conditions on this plans, and in some it evens make a difference if you live outside Germany later, for example.

Hi all

The most stupid, easy and efective way I found was simply divide the bonus in X parts.

Yes of yourse you will have to pay taxes but the main problem is in the German Tax System there are some jump steps or categories. If you are in one category and you earn a bonus, surely you will go to the next step, which of course pays more taxes.

I received a bonus. My chef adviced me about this tax problem and told me previously to the bank deposit the netto value. When I saw the number I almost dead, but I played a little bit with the salary calculator and finally we agreed to divide my bonus in parts and this way I receive the most of it.

The pension plan is a fabulous idea, but if you need the money, I guess this can work

Good luck

YO

Hi All,
Thanks a lot for all the information. Can anyone suggest me good insurance company for pension plan? What is the limitation for getting money back? When I leave germany, can I get my money back easily?

I got more than 10,000 euro (with more than 50% tax) bonus last year salary ... If I opt insurance company for pension now, Can I get tax benefits for last year bonus doing tax reclaim now? Any idea ?

I find this forum very useful for getting very good information, as I don't know good german so difficult to get information.

Thanks again to all for reply.

Alok

Hi Gupta,

You can contact below person through email or phone.. he can explain you the details. Or else you can take help of your colleagues..

Karlsruher Versicherungen...
Kontaktadresse:
Mr. Günter Seiter
im Beratungscenter Actionade
Volksbank Baden-Baden+Rastatt eG,
Sophienstr. 14, Baden-Baden
Tel. 07221 / 503 – 259 bzw. – 463
email: guenter.seiter@karlsruher.de

VSK