2021 payroll: Overview of all relevant tax changes and reforms

Christian EiseleSteuern

The year 2021 has brought a large number of tax changes and reforms for payroll accounting: On the one hand, the Annual Tax Act 2020, which will largely apply from January 1, 2021, will lead to a large number of adjustments, particularly in the area of payroll tax. On the other hand, wage tax regulations which would have expired at the end of 2020 have been extended or adjusted with regard to the Corona pandemic.

In order to help you keep track of the changes, we have compiled the most important payroll accounting related changes in this publication, including a short digression in connection with the changes in travel expense tax law.

  • Short-time allowance 
    • Grants to short-time allowance continue to be tax-exempt 
    • Higher short-time allowance
    • Reimbursement of social security contributions in case of short-time work
  • Remuneration in kind
    • Delimitation of cash salary and remuneration in kind 
    • Higher exemption limit for remuneration in kind 
    • New remuneration in kind 
    • Group clause for the valuation discount for rental benefits
    • Tax exemption for outplacement services
    • Additionality requirement for tax breaks in the case of benefits in kind
  • Corona measures
    • Stay of execution, deferral of and extension for payroll tax payments
    • Payment period for special Corona payments 
    • Home office allowance
    • Refund of extraordinary childcare services 
    • Cross-border commuters
  • Other legislative changes related to payroll accounting
    • Work in Great Britain after the Brexit
    • Increase of commuting allowance
    • Increase of allowances for trainers and honorary offices 
    • Solidarity surcharge no longer applicable
    • Increase of basic exemption
    • Child allowance
    • Tax treatment of travel expenses and travel expense reimbursements for business and work-related trips abroad as of January 1, 2021
    • New income thresholds and calculation parameters in social insurance 2021
    • Minimum wage
    • Digression: Revised tax treatment of employees’ travel expenses

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