Gross taxable income refers to the taxable salary in Payroll. It includes the remuneration to be taken into account for tax purposes for the Lohnsteuerabzug, and can therefore deviate from the total gross salary as well as the gross salary subject to social security contributions.
Gross taxable income
Different gross amounts may be shown on a Payroll form. The ‘taxable gross’ figure shows the wages that are treated as taxable for income tax purposes.
The Entgeltbescheinigung regulation refers to this value as taxable earned income. A distinction is made here between regular and other earnings.
Gross taxable income is therefore an important starting point for the Income taxdeduction. However, the exact amount of the Wage tax also depends on the statutory calculation rules and the individual Wage tax deduction characteristics.
Tax gross, Gross pay and social security gross – what is the difference?
The Gross wage refers fundamentally to the Remuneration before statutory deductions. Gross tax pay, on the other hand, takes into account the income tax treatment of the individual salary components.
The gross social security salary By contrast, this is the Remuneration subject to contributions for Social security. Tax law and Social securitysrecht follow different regulations, meaning that gross pay for tax purposes and gross pay for social security can differ.
In short: Tax gross relates to the tax classification, whereas social security gross relates to the social security classification of the Arbeitsentgelt.
Why can taxable gross salary differ from total gross salary?
Whether a component of remuneration forms part of taxable wages depends on the wage tax regulations. Certain employer benefits may, for example, be tax-free or subject to flat-rate taxation.
Non-cash benefits and benefits in kind can also constitute taxable remuneration, even though they are not paid out as a monetary amount.
Lump-sum taxed remuneration is to be distinguished from regularly taxable wages and is shown separately in the Certificate of earnings.
What role do ELStAM play?
Gross tax alone does not determine the amount of Wage tax to be withheld. For the Wage tax deduction, the individual ELStAM and further statutory calculation rules are taken into account.
Electronic Lohnsteuer deduction features include, among other things, tax class, factor where applicable, child allowances, tax-free allowances or addition amounts, as well as features for church tax deduction.
