§ 3b: tax-free premiums

Premiums for Sunday, public holiday and night work can remain tax-free. The advantage is considerable — and tied to conditions that are easily overlooked in everyday practice.

The rates

Work on the following day up to 4:00 also counts as Sunday or public holiday work if it began on the Sunday or public holiday.

The four conditions

For a premium to remain tax-free, all four must be met:

1. It is paid in addition to base pay, not as part of it. An “all-inclusive hourly wage of €20 for the night shift” contains no tax-free premium.
2. It is paid for work actually performed at the times stated. Flat-rate payments without reference to night or Sunday work actually performed are taxable.
3. The times are individually documented. That is exactly what time recording is for.
4. The rates are not exceeded. Anything paid above them is normal wages.

The two base pay limits

This is the point that almost all tools get wrong. There are two different caps:

This means: a premium can be tax-free and still subject to contributions — if the base pay is between €25 and €50.

Zeitflex calculates with both caps separately. That is also the reason why the Mini-job monitor works with the social security cap and not with the tax cap — for the marginal employment limit, the remuneration subject to contributions is what counts.

What Zeitflex shows

Per person and month:

• the total premium (what is paid)
• the tax-free portion under § 3b EStG
• the contribution-free portion under SvEV
• the hours per premium type, individually documented

All of this goes into the CSV and DATEV export.

Overlap

Night and Sunday premiums can be tax-free side by side. Sunday and public holiday premiums cannot: on a public holiday the public holiday rate applies, not the Sunday rate in addition.

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