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Annual special payment: entitlement, amount, tax

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The annual special payment is the Christmas bonus in the public service. Where in the private sector it is still a question of a voluntary service by the employer, there is a right to one Annual special payment regulated in the collective agreement of the public service (TVöD). But how high is it exactly? What special regulations are there? And how is the annual special payment taxed? We clarify all important questions ...

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Definition: What is the annual special payment?

Since the TVöD (collective agreement for the public service) and TV-L (collective agreement for the public service of the federal states) replaced the old collective agreements, the vacation and Christmas bonuses, which were previously listed separately, have also become an entitlement to an annual special payment

Every public service employee has a basic right to the annual special payment. The only requirement is that he has a permanent employment contract on December 1st of the corresponding year. This also applies to a dormant employment relationship (e.g. during parental leave) in which no salary is currently paid.

However, employees who terminated their employment before December 1st are not entitled to an annual special payment. It is completely irrelevant for what reason the employee left the company. These can therefore be quite diverse. As a result, there is no entitlement if one of the following cases exists on December 1st:

  • A fixed-term employment contract has expired
  • The employer has terminated the employment relationship
  • The employee has terminated the employment relationship
  • The employee has reached retirement age
  • A termination agreement was concluded by mutual agreement

Amount of the annual special payment

It is not very easy to determine the individual amount of the annual special payment. However, if you are a good computer, it is no rocket science to understand the exact regulations quickly. The basic principle is more important than the exact figures: First of all, it is crucial to find the individual assessment basis. This results from the average of the salaries in July, August and September. Only the basic salary plays a role: Success bonuses, overtime pay or other performance bonuses are not taken into account.

In addition, the pay group in which the employee was grouped on September 1st is decisive. This results in a certain, individual percentage for employees in the public service. For example, you can see yours for 2020 from the following list:

  • Pay groups E 1 to E 4, S 2 to S 3, KR 5 to KR 6: 88.91 percent
  • Pay groups E 5 to E 8, S 4 to S 8b, KR 7 to KR 8: 89.4 percent
  • Pay groups E 9a to E 11, S 9 to S 17, KR 9 to KR 15: 75.31 percent
  • Pay groups E 12 to E 13, S 18, KR 16 to KR 17: 47.07 percent
  • Pay groups E 14 to E 15 Ü: 32.95 percent

For the year 2021, the percentages have been adjusted downwards slightly. They look like this:

  • Pay groups E 1 to E 4, S 2 to S 3, KR 5 to KR 6: 87.43 percent
  • Pay groups E 5 to E 8, S 4 to S 8b, KR 7 to KR 8: 88.14 percent
  • Pay groups E 9a to E 11, S 9 to S 17, KR 9 to KR 15: 74.35 percent
  • Pay groups E 12 to E 13, S 18, KR 16 to KR 17: 46.47 percent
  • Pay groups E 14 to E 15 Ü: 32.53 percent

The annual special payment is then calculated from your individual percentage and the mentioned average salary. The different percentages are intended to ensure that the lower tariff groups also receive a corresponding annual special payment and are not neglected.

example: Anyone who earns an average of EUR 3,133.75 gross in salary group 9a (level 2) in the months of July to September 2020 is entitled to a 75.31 percent annual special payment. This is 2,360.03 euros, which results in a November payment of 5,493.03 euros gross.

If you are paid according to one of the collective agreements of the federal states (TV-L) or municipalities (TVöD-VKA), different tables apply, which you can see on the homepage of your respective federal state or municipality. For example, in certain tariff groups for the eastern federal states, an annual special payment of 88 percent of the western level applies.

Special cases and reduced claims

The annual special payment is not paid out in full in every case. For every employee who is absent for a longer period of time, it is important to know that the entitlement is reduced by one twelfth for each month in which the employee was not entitled to a salary. This primarily concerns unpaid leave or a longer period of illness. However, the latter does not occur until at least six weeks of incapacity for work. This so-called twelfth regulation can be found in § 20 paragraph four TVöD.

This does not apply to periods of maternity or parental leave. In these there is also no entitlement to payment of remuneration, but the annual special payment remains unaffected. So you can go on parental leave without worrying about the annual special payment at a disadvantage towards the end of the year.

Taxation and seizure of the annual special payment

Like the regular Christmas bonus in the private sector, the annual special payment in the public sector must also be fully taxed. Like vacation pay or severance payments, it is considered to be what is known as “other remuneration” for tax purposes and not as regular pay.

This means that the gross salary increases in November and, depending on the income tax class, correspondingly high taxes are due. As a result, surprisingly little net of the gross remains for many public sector employees, and the annual special payment largely remains with the state.

example The average salary of part-time educator Hilde Mustermann was 2,000 euros in the months of July to September. It is grouped in salary group TVöD S 8b. This means that she is entitled to a special annual payment of 1,788 euros in 2020. According to the income tax table, Hilde in tax class I. has to pay 196.35 euros in taxes on her income every month. In November, however, her income is 3,788 euros. This results in a tax burden of 697.63 euros in this month, more than three times as much as in the other months, although she has not even received double the gross salary.

In addition, there are the correspondingly higher social security contributions, the percentage of which, unlike the tax burden, does not change, but does add to the total. All of this can be perceived as unfair, but it affects every employee who receives Christmas or holiday pay and is part of our tax law, since a higher income is taxed correspondingly higher. It is therefore important to be aware of this in order not to be negatively surprised by the size of the deductions in November.

You also have to take into account that the higher tax burden has already been factored into the collective bargaining negotiations and that the percentages result from this, among other things. Many also wrongly assume that an annual special payment cannot be seized. Section 850a of the Code of Civil Procedure stipulates that an explicit Christmas payment cannot be seized, but the Federal Labor Court decided in 2016 that an annual special payment does not fall under this provision, as it is not tied to Christmas, but rather the work over the entire year honor away. (BAG, judgment 10 AZR 233/15 of May 18, 2016).

As a justification, the court added that the annual special payment would be correspondingly lower if the wages were lower in July, August and September. The special payment is therefore considered attachable and in this respect differs from the usual vacation pay with other employers.

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