(2022)
How do employees receive the energy price allowance?
The energy price allowance (EPP) is paid through the employer's payroll.
- Eligible are individuals residing in Germany who, in 2022, earn income from employment (§ 19 para. 1 no. 1 EStG) or self-employment (agriculture and forestry, business, freelance work) - i.e., employees and self-employed persons.
- Also eligible are volunteers as defined in § 2 of the Federal Volunteer Service Act (BFDG) and volunteers as defined in § 2 of the Youth Voluntary Service Act (JFDG): This includes, for example, the Federal Volunteer Service, voluntary social or ecological year, European Voluntary Service, International Youth Voluntary Service.
- Persons in marginal or short-term employment (mini-jobbers and temporary staff, seasonal workers) are also eligible.
- Not eligible are taxpayers without a residence or habitual abode in Germany, particularly cross-border commuters with limited tax liability. This is because people living abroad are either subject to lower energy prices than in Germany or benefit from comparable government measures that also relieve the local population of energy prices. Double funding for this group is not appropriate.
- Not eligible are civil service pensioners and retirees unless they also earn income from agriculture, business, freelance work, or employment. Recipients of exclusively other income according to § 22 EStG are also not entitled to the energy price allowance (e.g., members of parliament). Students and young families who only receive parental allowance, as well as other persons who exclusively receive wage replacement or social benefits, are also excluded.
- The energy price allowance is generally determined with the income tax assessment for 2022, unless the allowance is paid by the employer according to § 117 EStG.
- The energy price allowance is paid by the employer in September 2022 if the employee is in a primary employment relationship on 1.9.2022 and is classified in one of tax classes 1 to 5. For mini-jobbers and temporary staff, payment is made through the employer only if the employee has previously confirmed in writing to the employer that it is the primary employment relationship. The confirmation must be added to the payroll account.
- The energy price allowance is not paid through the employer if they do not submit a payroll tax return. This particularly applies to cases of short-term or marginal employment (e.g., in private households) where payroll tax is levied at a flat rate according to § 40a EStG. In this case, employees can receive the energy price allowance by submitting an income tax return.
- An energy price allowance paid by the employer must be indicated in the electronic payroll tax certificate with the capital letter E (§ 117 para. 4 EStG).
- The energy price allowance is taxable and is taxed at the individual tax rate. Additionally, church tax and solidarity surcharge may apply. According to the legislative justification, "separate information in the income tax return is not required for the taxation of the energy price allowance." For employees, the energy price allowance must be considered as income according to § 19 para. 1 no. 1 EStG for the year 2022. For mini-jobbers and temporary staff with wages taxed at a flat rate according to § 40a EStG, taxation of the energy price allowance is waived for simplification reasons (§ 119 para. 1 EStG).
- For self-employed persons, the energy price allowance is not part of business income but is considered "income from other services" according to § 22 no. 3 EStG for the year 2022. However, the exemption limit of 256 Euro, which usually applies to such income, is not applied here (§ 119 para. 2 EStG). Since the energy price allowance is not part of profit income, it is not subject to trade tax.
- The energy price allowance is exempt from social security contributions as it is not considered wages within the meaning of § 14 SGB IV.
- The energy price allowance is not to be considered as countable income for income-dependent social benefits (§ 122 EStG).
The largest group of eligible persons is relieved promptly through payments from employers (employees) or the reduction of income tax prepayments (self-employed) without having to take action themselves. If an income tax return for 2022 is submitted and the eligibility requirements for the energy price allowance are met, the energy price allowance will be determined ex officio with the 2022 income tax assessment.
A special application is not required. For employees, the energy price allowance is only determined if it has not yet been paid out by the employer, for example, because there was no employment relationship on 1.9.2022.
Further information can also be found in the FAQs of the Federal Ministry of Finance.
