Additional tax revenue of 3.5 billion euros from short-time work

The progression proviso on short-time allowances has generated combined additional tax revenue of around EUR 3.5 billion for the state in 2020 and 2021.

Although short-time allowance itself is not taxable, if the wage replacement benefits amount to more than 410 euros per year, the progression proviso applies to them. As a result, the personal tax rate for the remaining taxable income increases. Millions of employees were therefore required to file a tax return for the first time in 2020 because many companies opted for short-time work during the Corona crisis. According to information provided by the Federal Ministry of Finance in response to a question from the Bundestag, the state collected around 2.1 billion euros more in taxes in 2020 alone as a result of the progression proviso. For 2021, the state's additional revenue still amounted to 1.4 billion euros.