Advice from Stiftung Warentest
“Legal tax trick”: Why you should change tax class before parental leave
When is the tax class change for parental leave worthwhile?
© miodrag ignjatovic
Married couples should check and change their tax brackets before taking parental leave, advise the experts at Stiftung Warentest. Because in this way they could increase the parental allowance significantly – by several thousand euros. However, you have to be very quick.
Parental allowance is intended to enable both parents to look after their offspring. There is money from the state for this. However, the choice of tax class has a major impact on how much money really goes to fathers and mothers, has calculated the Stiftung Warentest and advises: Married couples should urgently check their own tax class. In this way, the parental allowance could increase significantly.
The tax class influences how much net of the gross remains. And since the parental allowance is based on the net salary, the tax bracket has a direct influence on the money that is available during parental leave. In short: “Those parents who stay at home after the birth and receive parental allowance should switch to a tax bracket that is more favorable for them,” write the experts from Stiftung Warentest. This trick to get more parental allowance was waved through by the Federal Social Court in 2009. The Stiftung Warentest writes of a “completely legal tax class trick”.
Change tax class: In most cases, the man is given preferential tax treatment
The fact that this “trickery” is even necessary is unfortunately still due to the fact that usually the man earns significantly better than the woman. If a spouse brings home at least 60 percent of the gross household income, the spouse should choose tax class 3 in normal times. If the woman now wants to take longer parental leave, it would be cheaper for the couple if she is in tax class 3 ..
The parental allowance is calculated as follows: income from non-self-employed work (around 1000 euros per year, 83.33 euros per month) is deducted, resulting in an average gross monthly salary. Taxes and social security contributions are deducted from this. This is how you receive the so-called Elterngeld-Netto, which is used to calculate the Elterngeld. Additional allowances (for additional children) are not taken into account. But there is also the sibling bonus of at least 75 euros. There is also information on this from the Federal Ministry for Family Affairs.
However, the trick may not work for high-earning couples: Anyone who earned EUR 2,800 or more net before the birth in tax bracket 5 will receive the maximum after the birth anyway. The state pays 65 percent of the last net salary as parental allowance, but not more than 1,800 euros per month of the child’s life. High earners with 2800 euros or more thus reach the top sum. Switching to tax class 3 does not bring any advantages.
Tax class 3: why it is worthwhile during parental leave
The classic combination of tax brackets (man with tax bracket 3, woman with tax bracket 5) could turn out to be unfavorable during parental leave. Because after the birth, the woman usually takes parental leave for 12 months. But before they do that, they should switch to tax class 3, advise the product testers. In this way, she gets as much parental allowance as possible. However, this only applies if she is employed and can expect more parental allowance than the minimum amount of 300 euros.
If the woman now switches to tax class 3, the couple initially has a little less net of the gross before the birth. But this injustice can be brought back with the tax return. (Since parental allowance is a financial compensation payment, you are obliged to submit a tax return anyway.) This does not apply to parental allowance.
Example calculation: change tax class
The Stiftung Warentest gives an example: A 40-year-old earns 3,000 euros gross and is in the unfavorable tax class 5 and receives only 1,477 euros net. On this basis, she would receive 906 euros as monthly parental allowance. A timely change of tax class to class 3 increases the net wage to 2105 euros. And the parental allowance also rises to 1,314 euros.
If the change is worthwhile, parents-to-be should not hesitate long, because the tax bracket that was prevalent in the assessment period (i.e. the 12-month period on which the calculation is based) applies. Means: Anyone who stayed in tax class 5 for too long before birth is also classified on the basis. The mother must apply to change to another tax bracket at least seven months before the start of maternity leave. Therefore, experts recommend thinking about changing the tax bracket immediately after the positive pregnancy test. If you are late and still want to change the tax class, you can find some tips at the Stiftung Warentest for a fee.
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