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Tax effects on minijobs related to new minimum wage
On January, 1, 2015, a statutory minimum wage which is largely independent of the sector has been introduced on a nationwide basis in Germany.
Accordingly, all employees shall be entitled to re-ceive a wage of at least EUR 8.50 gross per hour (Section 1, Para. 1 and Para. 2, Sentence 1 German Minimum Wage Law ("Mindestlohngesetz" or "MiLoG")). From 2018 on, the minimum wage will be adjusted annually.
The minimum wage applies to full-time and part-time employees. Therefore, it can also affect mi-nor employments (so-called "minijobs" or "450- EUR-jobs").
A marginal employment within the meaning of Section 8 Para. 1 of the Fourth Book of the Code of Social Law ("Sozialgesetzbuch Viertes Buch - SGB IV") occurs if the remuneration from this employ-ment does regularly not exceed EUR 450 per month or if it is a short-term employment ("seasonal work").
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Oliver Theobald Partner Frankfurt on the Main
New Regulation: tax treatment of employment income
The German Ministry of Finance has published in November 2014 a new circulation regarding the taxation of employment income in the international context. It came into effect as of January 01, 2015. These regulations have a binding effect for the fiscal authority as well as guarantee a constant taxation method by all German tax authorities. The reason for the amendment has been a modification to the...