For persons not required to register in USA, such as B. employees subject to limited income tax, the tax authorities are currently unable to provide the employer with electronic wage tax deduction features. In these cases, the employer’s tax office issues a paper certificate for the wage tax deduction upon request. This application must be made by the employee.
The employer can also apply for the tax class I certificate if he makes the application on behalf of the employee. The employer must keep the annual certificate for the wage tax deduction during the employment relationship, at the latest until the end of the respective calendar year. If the employment relationship is terminated before the end of the calendar year, the employee must be given the certificate for the wage tax deduction.
Income tax deduction procedure
The employer must pay the wage tax for all employees in one sum on certain due dates (monthly, quarterly or annually) to the tax office responsible for the company. For this purpose, the employer must submit a wage tax registration to the tax office (regularly by electronic transmission) in which the sums of the withheld or payable wage tax, church tax and the solidarity surcharge must be declared. Further information, e.g. about the employees, is not required.
The Business Year for You
In the course of the calendar year, too much wage tax will be reimbursed to the employee under certain conditions after the end of the year. This happens when the employer carries out an annual income tax adjustment or the employee submits an income tax return. In certain cases, an assessment for income tax is mandatory for employees, of the descriptions under “Income tax” and “Requirements for assessment of employees for whom wage tax is to be withheld”. In the case of income tax assessment, for example, too much withheld taxes are reimbursed, but too little taxes are levied subsequently. In that case the use of the income tax calculator is important.
- The debtor of the wage tax is basically the employee. However, the employer is responsible for the proper withholding and payment of wage tax. If the tax office determines during an audit that too little wage tax has been withheld, it can claim the employer or the employee directly for the shortfall.
For the Domestic Employers
Every domestic employer is obliged to collect and pay wage tax. The wage tax is not only withheld for employees who have a domicile or habitual abode in USA (unlimited income tax liability). Income tax must also be withheld from employees who do not have a domicile or habitual residence in USA if they are either employed in USA or if their foreign activity is exploited in USA (limited income tax liability). The same applies if the employees living abroad receive wages from domestic public coffers. The nationality of the employee is irrelevant.