Receiving a Christmas bonus whilst claiming Elterngeld
We’re in December, you just had a baby and are claiming Elterngeld. Your employer is about to pay your annual Christmas bonus as every year. Really nice, it will help with all these extra costs for the holidays and also you’re only receiving Elterngeld at the moment. But oh wait! What will happen to your Elterngeld if you receive a Christmas bonus? Let’s find out
Elterngeld: general information
Elterngeld is an income replacement benefit. In the same way that unemployment benefit or sick pay allowance also replace your income, Elterngeld is there to replace the income you are not earning because you are taking of your baby.
Elterngeld is typically based on a percentage of your average income before birth (the last 12 months before the start of maternity leave for employees and the last fiscal year for self-employed parents).
Why would getting a Christmas bonus impact my Elterngeld?
A Christmas bonus is income.
Elterngeld is an income replacement benefit.
See where the problem is? Since Elterngeld is based on the income you’re missing out on, getting a bonus of any sort whilst claiming Elterngeld will reduce your allowance.
How much will a Christmas bonus impact my Elterngeld?
Alright, let’s use an example for this.
First, you need to know what your calculation basis is, meaning what will your Elterngeld be calculated on. You take the last 12 months before the start of your maternity leave, add up all your payslips for this period then divide by 12 to have your average net monthly income before birth. Do you have this number? Good. For the purpose of this example, let’s say your calculation basis is 1750€.
Important: if this average is higher than 2770€, cap the number at 2770€ (the highest possible calculation basis for Elterngeld).
Now that you have your calculation basis, you know your Elterngeld should be ca. 66% of it.
Calculation basis = 1750€
Elterngeld Basic = 1155€
Let’s say your Christmas bonus is 500€.
Calculation basis = 1750€
Minus Christmas bonus: 1750€ – 500€
Your new calculation basis = 1250€
Your Elterngeld for that month = 825€
Note: only the Elterngeld payment for the month during which you got the bonus paid will be affected.
How can you circumvent this?
Well there two ways:
- Ask your employer to pay you the bonus after you have finished your Elterngeld period. Some accept to do it.
- Skip one month of Elterngeld and accept the bonus in the month during which you are not getting Elterngeld. You can always take that Elterngeld month later.
About Baby in Berlin
Baby in Berlin is a concierge service for young parents – for expecting international families in Germany who need assistance with the organization of their pregnancy and the paperwork related to baby and birth. Book your consultation today to make sure your Elterngeld application goes smoothly!