Taxation of a severance payment possible only by the employer or also by oneself by declaring it in the income tax return?
June 3, 2019 | 50,00 EUR | answered by Steuerberater Knut Christiansen
Hello...my question would be whether a severance payment always has to be taxed by the employer or if I can also have it paid out gross, in order to then declare the amount myself in the tax return for the year of payment, along with other income, which would have the advantage that for example, in the case of a severance payment in January 2020, the income tax due on the severance payment would only have to be paid 1.5 years later. If the taxation must be done by the employer, it would be important to know if the annual income tax table would be used, since the severance payment in January 2020 will be the only source of income besides unemployment benefits in that year. Or are there different ways of taxation?
Thank you!
Best regards,
A. Clever
Good day and thank you for your inquiry, which I would like to answer for you as part of an initial consultation.
In principle, the employer is obligated to withhold income tax, even for severance payments. This is because they are also liable to the tax office. A gross payment is therefore unfortunately not possible.
As part of the income tax calculation, the employer makes a forecast of the annual income and then uses the severance payment as a one-time payment. If necessary, you may also be able to take advantage of the so-called "Fünftelregelung" (five-fifths rule), as you have a concentration of income. You can find more information on this here: https://www.finanztip.de/steuererklaerung/abfindung-versteuern/
To calculate your net payment or tax burden, you could use this online calculator for example: https://www.steuern.de/abfindungsrechner.html
I hope this answers your questions, if not feel free to ask for further clarification.
Kind regards,
Knut Christiansen
Tax consultant
... Are you also interested in this question? 
