Ask a tax advisor on the topic of Severance pay

Change of tax class

November 20, 2013 | 50,00 EUR | answered by StB Patrick Färber

I will terminate my employment relationship by way of a termination agreement/severance payment by 31.12.13. The severance payment in the amount of approximately 190,000.00 EUR will be paid out in January 2014. I will take advantage of the fifth provision. I have already registered as jobseeker with the employment agency as of 1.1.2014. I am expected to receive unemployment benefits (with a waiting period imposed, as the notice period was not adhered to) starting from 08.2014. Due to my age (58 years), the likelihood of finding a new job is very low. Currently, I am in tax class 1. Now my employer has informed me about the possibility of switching from tax class I to tax class VI. Which option is more beneficial for me? Should I keep tax class I or switch to VI?

StB Patrick Färber

Dear questioner,

In order to answer your question, I need to ask a clarification question:

For what specific reason does your employer recommend a change in tax class to tax class VI, where the deductions tend to be higher than in tax class I?

Thank you for a brief response.

Best regards,

P. Färber