What is the solidarity surcharge and how is it calculated?
June 20, 2024 | 40,00 EUR | answered by Ralf Otten
Dear Tax Advisor,
My name is Dietrich Lehmann and I am currently preparing my income tax return for the year 2021. In my research, I came across the term "Solidarity Surcharge", of which I am not exactly sure what it means and how it is calculated.
My situation is as follows: I am employed and earn a gross annual income of 50,000 euros. I have no children and no extraordinary expenses to consider. So far, I have always had the Solidarity Surcharge automatically deducted by my employer, but I would like to learn more about how this surcharge is actually calculated and if there are ways for me as an employee to minimize it.
My concerns are that I do not fully understand how the Solidarity Surcharge is calculated and if there are options for me as a normal earning employee to reduce my overall tax burden. I would like to know if as a single person with an average income of 50,000 euros per year, I can benefit from tax relief or advantages and how they affect the Solidarity Surcharge.
My specific question to you is: What is the Solidarity Surcharge and how is it calculated? Are there ways to minimize or even avoid this surcharge? What tax options are available to me as an employee with an average income to reduce my tax burden?
I look forward to your expert assistance and thank you in advance for your help.
Sincerely,
Dietrich Lehmann
Dear Mr. Lehmann,
Thank you for your inquiry regarding the solidarity surcharge in your income tax return for the year 2021. I am happy to explain in detail what this surcharge is and what options are available to you as an employee to reduce your tax burden.
The solidarity surcharge was introduced in 1991 as a temporary measure to finance the German reunification. It currently amounts to 5.5% of the income tax and is calculated on the income tax, church tax, and the solidarity surcharge itself. This means that as an employee with a gross annual income of 50,000 euros, you will have to pay the solidarity surcharge on your income tax.
To minimize or avoid the solidarity surcharge, there are various tax options you can consider. One option is to use tax allowances and lump sums, such as business expenses, special expenses, or extraordinary burdens. These can reduce your tax assessment base and thus also reduce the solidarity surcharge.
Furthermore, you can benefit from tax advantages such as the Riester pension or company pension schemes to lower your tax burden. You can also make targeted donations or contributions to charitable organizations to reduce your tax burden and thus also reduce the solidarity surcharge.
As an employee with an average income, you have plenty of opportunities to reduce your tax burden and therefore minimize the solidarity surcharge. However, it is important that you review all tax options and possibilities within the scope of your income tax return and take advantage of them if necessary.
I hope this information is helpful to you and I am available for further questions. Thank you for your trust and inquiry.
Best regards,
Ralf Otten
