Tax-Free Supplements, Benefits in Kind and Company Cars: What Counts for Elterngeld

For employees, Elterngeld uses your income from employment “in money or money's worth” (§ 2c Abs. 1 BEEG), taken from your payslips. Two groups are left out:

• •One-off payments (sonstige Bezüge) such as a 13th salary, holiday or Christmas bonus, commissions or severance pay. The tax treatment on the payslip decides.
• •Tax-free income under §§ 3, 3a and 3b of the Income Tax Act. By tax law it is not income, so it does not count for Elterngeld either.

Typical examples:

• •Sunday, public holiday and night supplements, as far as they are tax-free under § 3b EStG
• •Tips
• •Tax-free travel expense reimbursements
• •Tax-free employer contributions to a company pension (Pensionskasse, Pensionsfonds, Direktversicherung) within the tax-free limit
• •Private use of a work computer or phone
• •Tax-free allowances for volunteer or coaching work within the legal limits

Only the tax-free part is ignored. If supplements go beyond the tax-free limits and are taxed as regular pay, that taxed part counts.

If you may use a company car privately, the taxable value of that use (geldwerter Vorteil) appears on your payslip as regular pay. It counts for the assessment period and raises your Elterngeld. The same applies to other regular, taxable benefits in kind.

Amounts you pay yourself for the car, such as a monthly contribution or fuel you pay for, reduce the taxable value. Giving up salary in a salary conversion scheme does not.

If you stop working during Elterngeld, your employed income for those months is normally 0 €. Benefits that continue without work are the exception: the private use of a company car, or a taxable home office allowance, still counts as income in those life months.

The month then becomes a month with income, and your Elterngeld is reduced by your replacement rate (65 to 100 percent) of the Elterngeld-Netto attributed to that benefit (§ 2 Abs. 3 BEEG). The company car does not count for a life month if you return it to your employer for that entire life month. You need a separate confirmation from your employer for this.