ELStAM, employees, allowances (income tax reduction)

By taking allowances into account in the wage tax deduction criteria, the wage tax that the employer has to withhold from the employee's wages is reduced.

• The allowance is saved as an electronic wage tax deduction feature (ELStAM) and made available to the employer. The form design for the application for wage tax reduction 2025 and for the ELStAM forms 2025 has been changed. A new main form "Application for wage tax reduction and wage tax deduction features" has been created. The "main form" only contains general queries, e.g. about the name, address. In addition to the main form, the relevant attachments must be attached to the application. The following attachments are assigned to the main form:
  • Annex Simplified Application / Other
  • Annex Advertising Expenses
  • children's facility
  • Annex Special Expenses/Extraordinary Expenses
  • Annex Household-related expenses/energy measures
  • Investment Tax Class Change
  • Appendix electronic payroll tax deduction features (ELStAM).
• The “Application for a change of tax class”, the “Declaration of permanent separation” and the “Declaration of resumption of marital / civil partnership community” have been integrated into the “Application for income tax reduction and income tax deduction characteristics” as a new “Tax class change form”
• If you wish to apply for no more than the same tax allowance or the same number of child allowances as for the previous year and the relevant circumstances have not changed significantly, it is sufficient to submit the Simplified Application / Other form in addition to the main form.
• The allowance can be applied for for a maximum period of two calendar years. A change to the allowance can be applied for within this period if the allowance increases, for example due to increased business expenses. If, however, the allowance decreases, there is an obligation to report this to the tax office immediately.
• Anyone who takes an allowance into account is generally obliged to submit an income tax return. Exceptions are cases in which only the flat-rate amounts for disabled people and survivors, the relief amount for single parents have been entered or the number of child allowances has been changed.
• If a wage tax allowance is not applied for, the corresponding expenses can still be claimed in an income tax return.