Which tax classes make sense during parental leave?
March 3, 2021 | 50,00 EUR | answered by Steuerberater Knut Christiansen
Hello,
my wife and I got married at the beginning of February 2021.
A week ago, our child was born.
She now wants to take parental leave until December 2021, and I probably won't take any parental leave this year (if so, probably 1-2 months at the end of the year).
My monthly gross salary is 7,850€ (13 salaries), while my wife's is 7,500€ (12 salaries), each plus annual bonuses.
We are now considering which tax class would be most beneficial for us.
Until February 2021, we were both in tax class 1 as an unmarried couple.
Since the difference in income is minimal, it seems that only tax class 4/4 makes sense.
Now my question is:
How does this work in 2021 when my wife is on parental leave and only receiving the maximum amount of parental allowance (1,800€)? Would a temporary switch to tax class 3/5 make sense this year? What would be the implications on our joint tax return in 2021? Should we expect to make additional payments?
Thank you very much!
Good day and thank you for using ask-a-tax-expert.com!
I would be happy to answer your question as part of an initial consultation.
First of all, I would like to clarify that tax classes only regulate the monthly distribution of tax prepayments (income tax deduction) during the year. With the income tax return, the tax office calculates the total taxable income and calculates the corresponding tax on it. The income tax amounts deducted based on the respective tax class are then subtracted. However, the actual total tax burden remains the same regardless of the tax class. Depending on the tax class chosen, you may have either overpaid a lot during the year (e.g. tax class 5 + 6) or very little (tax class 3).
So, if you now switch to tax class 3, your monthly net income will initially increase. However, since parental leave benefits are subject to the progression clause, your personal tax rate for the year 2021 will increase. You would then have to repay some of the insufficiently paid income tax through the income tax return to the tax office. Therefore, an additional payment can be expected, which will likely be significantly more than 1,500 EUR with a parental leave benefit of approximately 18,000 EUR. Of course, you could set aside a portion of the higher net salary to pay this later additional payment.
The choice of tax class can also be important in the area of continued payment of wages. Since the last tax class is decisive for a continued wage payment entitlement (e.g. unemployment benefits, parental leave benefits, or sick pay), you should also pay attention to this. From a tax point of view, the choice of tax class basically has no effect on the ultimately payable income tax. So, you don't save anything by doing so. However, the effects on possible income replacement benefits can be significant.
I hope this answers your question, but if not, please feel free to ask for further clarification.
I would like to point out that this forum cannot replace a detailed and personal tax consultation, but is mainly intended to provide an initial assessment of tax matters. By adding or omitting relevant information, the legal assessment of your issue could be different.
Best regards,
Knut Christiansen
Tax Advisor
