Tax Advisor Explains: Electronic Payroll Tax Statement

Fortunately, the days when income tax statements were printed on paper and handed out are over. In 2003, the income tax statement made the transition to the digital world and has been transmitted electronically ever since. The electronic income tax statement offers many advantages and is essential for both employees and employers. As your tax advisor, we would like to provide a comprehensive overview of the electronic income tax statement in this article.

Basics of the Electronic Payroll Tax Statement

The contents of the electronic income tax statement are based on what is officially known as ELStAM (Electronic Income Tax Withholding Characteristics). Looking at the official term makes the essential functions of the income tax statement clear. The ELStAM should primarily be viewed as a source of information for income tax withholding characteristics. The following important information can be found on the electronic income tax statement:

• The employee’s tax bracket
• Taxpayer’s church tax attribute
• Church tax status of the spouse/partner
• Number or amount of child allowances
• Income tax exemption
• Exemption and additional amount

For tax matters related to employment, the wage tax statement is therefore an essential component. All this data is stored and managed by the Federal Central Tax Office.

How can the electronic income tax statement be accessed?

The information in the ELStAM is generally relevant to three parties: the tax authorities, your employer, and you as the taxpayer. Since the tax authorities ultimately store all the information, they can easily access it internally and use it for upcoming tasks. The employer does not automatically have access to the data. In order for your employer to gain access to the income tax information, they need the following details from you:

• Tax identification number
• Date of birth
• Details regarding primary and secondary employment

With this information, the employer can view the electronic income tax statement. However, it should be noted that only the primary employer has full access to the ELStAM data. Other employers, such as those for a part-time job, can only access selected information. For example, the part-time employer can view church tax deductions, a possible tax-free allowance, and tax class VI. This means that access to information for this employer is significantly limited.

Of course, you can also access the stored data yourself. To do so, simply use the ELSTER portal. To retrieve the data in the ELSTER portal, you must already be registered or register as a new user. If questions regarding income tax arise, you can quickly look up the relevant information this way. As tax advisors, however, we would also advise you to regularly check the information on the income tax statement for accuracy.

Changes to the Payroll Tax Statement

Taxpayers’ professional and personal situations can change at any time, which often leads to changes in their tax situation. In some cases, the information on the income tax statement must also be updated. Some changes are made automatically by the tax office. Other changes must be reported to the tax office by you. Above all, a change in tax bracket must be reported to the tax office. You must also report child tax credits on your own. Joining or leaving a church, marriage or entering into a civil partnership, birth, adoption, or death are among the changes that are reported to the tax office by the respective registration authorities. These changes should therefore appear automatically on the certificate. If the changes do not appear, taxpayers can, of course, contact the tax office directly and provide the new information.

Exercise your rights as an employee!

Employees can do more than just view the information on their wage tax certificate. There are other rights and options you should be aware of. First, there is the so-called right to information, which simply governs the retrieval of all information. In addition, you can also view on the ELSTER portal which information has been retrieved by your employer over the past two years. What may initially sound like “unimportant” information can be very helpful in various situations. It is therefore important that you are aware of this option. With the appropriate request, you can even have certain employers blocked from accessing your information. Both partial and full blocking of the stored information are possible. While this is not necessary in most cases, it can be of great benefit in specific situations. For the exact procedure regarding a block, you should contact a qualified tax advisor.

Changing Employers and ELStAM

Starting a new employment relationship or terminating an existing one is important for your wage tax certificate. As soon as you have a new employer, you must provide the employer or the relevant department within the company with your tax identification number (Tax ID) and your date of birth. You must also specify whether the position is a secondary or primary employment. The employer will typically handle the subsequent steps regarding ELStAM. If an employment relationship ends, the employer must report this information to the Federal Central Tax Office. The corresponding entry in the income tax statement is then made automatically.

Side Job and ELStAM

If you wish to take on another job in addition to your primary employment, the same steps initially apply as for a primary job. You must provide your employer with your tax identification number (Tax ID) and date of birth. You must also inform the employer that this is a secondary job. It is possible that the basic tax-free allowance for your primary job is not fully utilized. If you wish to use the remaining allowance for the secondary job, you must inform your new employer of this.

Correcting Incorrect Data in ELStAM

Of course, all information on the electronic wage tax statement should be correct. However, mistakes can happen here as well. In addition to human errors, digital tax administration is unfortunately not immune to errors either. This makes it all the more important that you regularly check whether all ELStAM data is correct. A quick review should be conducted, especially when changes occur. With a bit of luck, your employer may also notice errors and inform you of them. Generally, however, employers do not check data in ELStAM and are not required to do so. Therefore, as a taxpayer, you should regularly review the information.

But what should you do if you notice an error? As is often the case with tax matters, there is a specific form for this situation that you can simply fill out and submit to the relevant authority. If you are unsure which form to fill out or what the correction should look like, we recommend consulting a qualified tax advisor.

Tax Consulting in Düsseldorf and Oberhausen

In fact, the topic of ELStAM is not overly complex. As long as you, as a taxpayer, keep basic aspects in mind and have a general overview, you’re in good shape.

Unfortunately, there are many other tax issues that require significantly more expertise and experience. Fortunately, to save you from having to spend weeks researching, your tax experts at Trimborn. Partner are here to help. At our offices in Düsseldorf and Oberhausen, our team is ready to address your questions and concerns. With years of experience and extensive industry specialization, we can offer you the best possible service. Contact us to schedule an initial consultation. We look forward to your visit!