SteuerGo FAQs

(2023) What are remunerations for multi-year work?

A subsequent payment or advance payment for multi-year employment (e.g. severance payments) can be taxed at a reduced rate in the year of payment using the five-year method. The key factor is that the employment spans two calendar years.

The so-called five-year rule benefits extraordinary income under German tax law (§ 34 EStG). These "income subject to preferential tax rates" are earnings generated over several years but realised and taxed in a single year.