Germany’s draft 2026 withholding formula includes technical changes related to the withholding of employee social taxes and anticipates rates and thresholds taking effect for 2026, the country’s finance ministry said Sept. 25.
The draft formula (German) adds unemployment insurance to the lump sum known as the Vorsorgepauschale, the combined amount of employee social taxes that is subtracted from income subject to income tax, the Federal Ministry of Finance said.
More about the treatment of the lump sum starting in 2026 is included in an Aug. 14 letter (German) from the ministry. Among the provisions in the letter are that there ...
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