Severance pay calculation
January 11, 2012 | 25,00 EUR | answered by Dr. Yanqiong Bolik
I am 34 years old and will receive a severance payment of 96869.98 euros from a termination agreement this year (31.07.). My expected income for this year will be 46550 euros. I am in tax class 3/0. My question is, what impact does my wife's income of 46000 euros have on the fifth rule. She is in tax class 5/0. My approach would be:
My income: 46550 euros Tax in 2012: approx. 5500 euros
Income + 1/5 severance payment: 65924 euros Tax: approx. 11077 euros
I would subtract 5500 euros from the 11077 euros and multiply by 5, resulting in: 11077-5500= 5577 x 5= 27885 euros
I would subtract this 27885 from 96869.98 = 68984.98....
and now I am stuck, how do I take into account my wife's income, considering I calculated the net severance payment based on the favorable tax class 3??
Thank you!
Dear inquirer,
Thank you for your inquiry, which I will gladly answer, taking into consideration your input and the rules of this platform.
Please note that my explanation is based on the presented facts, and that adding, omitting, changing information, or the ambiguity of the information can alter the tax result.
If you choose separate taxation, your wife's income does not affect the half-rule. In the case of joint taxation, the calculation of income tax taking into consideration extraordinary income subject to the half-rule, according to Section 34.2 of the Income Tax Act (EStH), is as follows:
1. Tax calculation according to § 34 para. 1 EStG
1.1 Calculation of the tax amount without income according to § 34 para. 1 EStG
Taxable income (in the case of joint taxation: sum of your income and your wife's income)
- Income according to § 34 para. 1 EStG
= Remaining taxable income I
Tax on this amount without income according to § 34 para. 1 EStG
1.2 Calculation of the tax amount with 1/5 of the income according to § 34 para. 1 EStG
Taxable income
- Income according to § 34 para. 1 EStG (income subject to the half-rule)
+ 1/5 of income according to § 34 para. 1 EStG
= Remaining taxable income II
Tax on this amount with 1/5 of the income according to § 34 para. 1 EStG
1.3 Calculation of the difference amount according to § 34 para. 1 EStG
Tax with 1/5 of the income according to § 34 para. 1 EStG
- Tax without income according to § 34 para. 1 EStG
= Difference amount
Fivefold difference amount according to § 34 para. 1 EStG
2. Calculation of the income tax to be assessed
Tax without income according to § 34 para. 1 EStG
+ fivefold difference amount according to § 34 para. 1 EStG
= Statutory income tax
I hope I was able to assist you.
If there is still any uncertainty, please feel free to use the follow-up function.
Best regards,
Dr. Yanqiong Bolik
Tax advisor
Bildstöckle 6, 70567 Stuttgart
Tel: +49 (0)711 / 9332 2657
Email: info@zdbz.de
www.steuerberatung.zdbz.de
