Retrieve electronic income tax deduction items (ELStAM)

Creation and use by the employer of electronic income tax deduction items to determine income tax.

Income tax deduction items are needed to calculate the tax amounts (income tax, solidarity surcharge and, if applicable, church tax) that you as an employer must withhold from your employees’ wages and pay to the tax office in accordance with the general regulations.

For this purpose, there is an electronic procedure called electronic income tax deduction items (ELStAM) with a database at the tax office in which this data is stored and made available to you as an employer for electronic retrieval.

You as an employer, or the person you have appointed to deduct income tax (e.g. a tax office), must register your employees for the ELStAM procedure and regularly retrieve their ELStAM.

During their period of validity, you must use the retrieved ELStAM for the income tax deduction of your employees until

  • the tax office notifies you of amended ELStAM available for retrieval, or
  • you notify the tax office of the termination of the employment/service relationship. You must submit this notification immediately and electronically, using the officially prescribed data set for employee deregistration.

As an employer, you are bound by the ELStAM. If the information is incorrect, it is up to the employee to contact the tax office. Only at their request can the ELStAM be changed by or through the tax office.

Flat-rate income tax

Under certain circumstances (e.g. in case of temporary or part-time employees), you can waive the requirement to retrieve the ELStAM for individual employees. The tax amounts are then not calculated according to the employee's personal taxation items, but according to a prescribed (flat-rate) tax. In this case, however, the tax amounts - instead of being withheld from the wages - must be paid by you in addition to the wages. Whether you can pass on the flat-rate tax to the employee depends in particular on the provisions in the employment contract.

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Service details

Prerequisite

Registration/ELSTER certificate

The ELStAM database is accessed electronically. As an employer, you must identify (authenticate) yourself to the tax office.

The ELSTER certificate required for authentication is issued free of charge when registering at "ELSTER: Ihr Online-Finanzamt" (www.elster.de). Employers are advised to register for a non-personal certificate (organizational certificate).

If you have your payroll accounting done by a tax consultant or a service provider and have the data transmitted directly by them, you do not need your own registration. In this case, it is sufficient for the third party to register, since they act as the data transmitter.

Software

You need suitable software to participate in the ELStAM procedure.

Data for ELStAM retrieval

To retrieve the ELStAM, you must provide the following key data of the individual employee to the tax office in the electronic procedure:

  • Tax ID and date of birth
  • Information on whether yours is the primary employment relationship or a secondary employment relationship
  • In the case of a secondary employment relationship: whether and in what amount a tax allowance created for this purpose is to be claimed

Employees are obliged to provide their employer with this information upon entering the employment relationship for the purpose of ELStAM retrieval.

Procedure

  • All employees whose income is not to be taxed at a flat rate must be registered initially with the tax office via remote data transmission using your customary software.
  • In certain cases where electronic employer retrieval is blocked, you cannot register the employee and tax class VI must be applied to them.
  • You will receive the ELStAM for retrieval for the employees you have registered. You can retrieve them using your customary software. The ELStAM must be transferred to the employee's payroll account and applied from the validity date.
  • If the ELStAM of individual employees have changed (e.g. in the event of an initial or increased tax allowance), the tax office will notify you of this via change lists. As a rule, you have to retrieve the provided change lists on a monthly basis.
  • Since there are no monthly changes to the ELStAM in the majority of cases, the tax office provides a notification service that informs you by e-mail when a change list has been provided. You can set up the notification service under "My ELSTER" (online tax office, www.elster.de).
  • Upon the death of an employee, a retrieval of the ELStAM will generally be blocked automatically. If wages are paid to heirs or surviving dependents, they must be registered by you as employees, so the tax office can create ELStAM and make them available for retrieval.

Costs

None

Note: Additional expenses may be incurred by using third-party services and software.

Miscellaneous

For details on the ELStAM procedure, in particular on authentication, registering and deregistering employees, and retrieving ELStAM, see "ELSTER: Ihr Online-Finanzamt".

Hardship provisions in the ELStAM procedure

Upon your request, the tax office may exempt you from the obligation to participate in the ELStAM procedure in cases of hardship, especially as long as you do not yet have the technical means to communicate via the Internet. You must then participate in a substitute procedure in which the tax office provides you with the income tax deduction items of your employees and their changes in writing for one calendar year.

Legal basis

  • § 39e Einkommensteuergesetz (EStG) – Verfahren zur Bildung und Anwendung der elektronischen Lohnsteuerabzugsmerkmale
  • § 40a Einkommensteuergesetz (EStG) – Pauschalierung der Lohnsteuer

Release note

Saxon State Ministry of Finance. 14.01.2020