2020 tax ceilings and other changes

In addition to the new tax ceilings and ceilings that are important for statutory pensions, supplementary pensions and other replacement incomes, there are a number of innovations in the work accidents branch.

In 2020 you will again be able to pay a contribution of between EUR 990 and EUR 1,270 for individual pension savings, the so-called dual pension savings in the 3rd pension pillar. For example, you pay EUR 297 (= 30%) less tax if you deposit EUR 990 or EUR 317.5 (=25%) less if you save EUR 1,270. All amounts between EUR 990 and EUR 1,118 are less interesting because of the lower tax benefit in relation to the higher savings amount. For long-term savings, there is an indexation up to a maximum of EUR 2,390.

In addition to these amounts, the active members with self-employed status can save fiscally interesting savings via the VAPZ or the Free Supplementary Pension for the Self-Employed amounting to 8.17% of their professional income with a maximum of EUR 3,291.30. If the VAPZ has a 'social character', the amount rises to 9.40% of the income with a maximum of EUR 3,786.81. You calculate the allowed contribution by multiplying the taxable income 2017 by the coefficient 1.052237.

With regard to the calculation of the maximum contributions to be paid for supplementary pensions, 2nd pillar (80% rule), the estimates of the statutory pension or the pension ceilings are indexed as follows:

- Self-employed persons: 25% of income with a maximum of EUR 17,530.98
or in other words to a maximum income of EUR 70,123.92

- Wage earners: 50% of the wage with a maximum of EUR 29,720.27
or in other words on a maximum income of EUR 59,440.54

- The minimum estimate of the statutory pension is EUR 15,196.38.

The novelties for occupational accidents are the extension of the law to the "small statutes" (see our Newsletter of June 2019) and the reduction of the insurance tax from 3.49% to 3.26%. The benefits following an occupational accident for salaried personnel will be calculated in 2020 on the basis of an indexed wage ceiling of EUR 44,817.89.

The invalidity benefits following a private accident or illness are calculated on the basis of a wage ceiling of EUR 44,957.86.

The employer's contribution within the framework of an individual pension commitment for wage earners (IPL) is deductible up to EUR 2,520. Not to be confused with the Free Supplementary Pension for Employees (VAPW) where the contribution is at the expense of the employee (see our Newsroom of November 2018).

The maximum wage bonus or 'non-recurring result-related benefits' may amount to EUR 3,413 in 2020.