In Germany, income tax is the most important tax for business and workers. For one calendar year, you pay income tax on all of your earnings. Find out about ELStAM, the electronic wage tax deduction features work.
The old cardboard wage tax card was finally obsolete in 2013: Employers and tax authorities rely on the electronic wage tax deduction features, or Elstam for short. This procedure is practically an electronic income tax card.
An overview of ELStAM
- The electronic wage tax deduction features, or ELStAM for short, have replaced the wage tax card.
- The data record includes your tax class, the number of your child allowances, whether you pay church tax and, if applicable, your allowance.
- Your employer can access your data electronically. The information stored at the Federal Central Tax Office is binding.
- When you change jobs, you no longer have to hand in an income tax card, you only have to enter your tax identification number, your date of birth and possibly an income tax allowance.
What does ELStAM mean for employees?
ELStAM has led to organizational changes, especially for employers. However, it also brings changes for you as an employee: If your wage tax deduction criteria change, for example, the residents’ registration office is no longer responsible, but the tax office in your place of residence.
If you want to change the tax class as an employee or apply for a wage tax reduction, you must now also contact the tax office. However, changes to data relating to registration, such as marriage, the birth of a child, entering or leaving the church, must still be made by the residents’ registration office.
What electronic wage tax deduction features are there?
The ELStAM is the information that used to be found on the front of your cardboard income tax card:
- Tax class
- Church tax characteristic
- Number of child allowances
- Income tax allowance
These data are stored at the German Federal Central Tax Office and can be called up by the employer on a computer. For the employer, only the electronically stored data are generally binding. They are to be used by him for the duration of the employment relationship.
Changes, such as a change in the employee’s tax class, are made available to the employer by the tax authorities. With the appropriate software, not only can data be retrieved, it is also updated automatically after changes.
In order to be able to access the ELStAM of its employees, employers must register for the Elster online portal. As a rule, such a registration already exists because this method has long been required by law for the transmission of income tax certificates.
If these tasks are performed by a tax advisor or another service provider, the data is retrieved via their registration. In these cases, it is not necessary to register the employer.
What do you have to consider when changing jobs?
When you start a new job, you only need to give the employer the following information at the beginning:
- Your date of birth
- Your tax identification number
- Whether it is a main or a secondary employment relationship
- Whether and in what amount there is an income tax allowance
Your new employer can use this information to register you in the ELStAM database. He then receives a so-called registration confirmation list from the Federal Central Tax Office with your current income tax deduction features. This allows your new employer to deduct the individual income tax for you.
Who can access the ELStAM data?
Only your current main employer is entitled to access the electronic wage tax deduction features. If you have other employers, they can also call up the data necessary for the wage tax calculation.
However, only part of the ELStAM is available to secondary employers, namely the possible deduction of church tax, possibly an exemption and tax class VI, which you are automatically assigned to every employer except the main employer.
You can use a positive list to specify which of your employers will be given your data for retrieval and which employers should be partially or completely excluded from it. In this way you can ensure that only what your employer actually needs for your payroll is known about you. You have to submit an application to the tax office responsible for you.
How can you use your right to information?
Information about which electronic wage tax deduction features are stored for you at the Federal Central Tax Office and which employers have accessed them in the last two years can be found in the Elster online portal. To do this, you have to enter your tax ID for registration.
You can usually find your data on your pay slip so that you can compare the information. You can also obtain information from your responsible tax office.