During parental leave, many families are not so well off financially. Because wage payments are different than usual and a special payment during parental leave may not be made. But there are differences, which can be read in the employment contract: Some special payments must be granted during parental leave, others not. This article is dedicated to the payments of vacation allowance, which is handled differently during parental leave and pregnancy, as well as the payments of Christmas bonus during pregnancy and parental leave.
Vacation pay during parental leave
Conditions, amount and tax coverage
In general, a distinction must be made between two periods when it comes to parental leave: maternity leave directly affects the weeks before and after the birth. During this time, the employer must pay the vacation allowance. This is determined by law. The reason for this is that these periods are assessed as normal working weeks, even if a ban on employment applies under certain circumstances.
In the parental leave following maternity leave, the situation is different. A distinction is made according to the character of the payments. If vacation pay is granted to reward work performance, it does not have to be paid during parental leave. This applies to the vacation allowance just as much as to the 13. Monthly salary and the Christmas bonus. However, the employment contract often states that the vacation pay rewards company loyalty or rewards work performance and company loyalty equally. Then the vacation pay has a mixed character. In both cases, it is granted during parental leave, because company loyalty exists even then. During parental leave, the employment contract is not invalid or canceled, but is suspended. It is still legally valid.
An exception exists if the employment contract or collective agreement excludes the payment of vacation pay during parental leave. Vacation pay may be subject to social security contributions during parental leave.
If employment subject to social insurance continues during parental leave, the vacation allowance applies to the contribution calculation for the month of payment. The situation becomes more complicated if there is a change in the social security obligation. If exempt from compulsory social insurance, no contributions need to be deducted from the vacation allowance. This is the case if the person concerned has already taken parental leave in the previous year.
Employee Anette has been on parental leave since November 2016 and does not work, not even marginally. The employment contract is suspended. In May 2017, she will receive her vacation pay. It is non-contributory because no social security contributions have yet been paid in 2017.
For tax purposes, vacation pay is considered other remuneration, with the exception of the case where the vacation pay is paid continuously throughout the year, each month, as part of the employee’s salary. Then it is taxed like wages.
Vacation pay during pregnancy
Requirements, amount and tax coverage
During pregnancy, the vacation allowance is treated as usual. This applies both with regard to social security contributions and taxation. Exceptions exist if the employment relationship is changed, for example, full-time employment is changed to part-time or marginal employment. These changes also affect vacation pay, and the effects depend on the individual case.
Christmas bonus during parental leave
The same applies to the Christmas bonus as to the vacation bonus. It is granted during the statutory periods of protection before and after childbirth. During parental leave, payment depends on contractual agreements. If the Christmas bonus is to be seen as consideration for work, it is not granted during parental leave because the employee does not perform any work during parental leave.
If the Christmas bonus is determined as a reward for loyalty and company loyalty, it must also be granted during parental leave, according to the legal requirement. Because the company loyalty existed, since with entrance into the parental leave no notice was pronounced. After parental leave, loyalty to the company is expected – this is the reason why the Christmas bonus is still to be drawn. In the case of pregnancy, the employment relationship continues and work is performed, so that the Christmas bonus is also paid in the specified amount in this case.
Requirements, amount and taxation
The amount of the Christmas bonus, whether it is paid for work performance or for loyalty, is specified in the contract. In the employment or collective agreement, instead of Christmas bonus, terms such as 13. monthly salary or annual bonus. Both terms mean the same thing.
If Ms. Ingeborg is paid on 13. If she goes on parental leave on December 1 and was previously on maternity leave, she is entitled to the contractually stipulated Christmas bonus. She did not perform any work in December because she was already on maternity leave at the beginning of the month. Nevertheless, the employment relationship is not deemed to be suspended until the start of parental leave. Therefore, she is entitled to the special payment during parental leave.
Ms. Edeltraut went on parental leave in November. She does not receive her Christmas bonus because, according to the employment contract, it is paid for work performed. Not working in December. She is therefore no longer in a statutory period of protection. Thus, she is not entitled to the special payment during parental leave.
Ms. Chantal went on parental leave in October. Your employment contract states that the Christmas bonus is paid as a reward for your loyalty to the company. She receives a Christmas bonus because her employment contract continues to exist. She will continue to be loyal to her company after her parental leave ends. Thus, she is entitled to the special payment during parental leave.
From a tax point of view, Christmas bonuses and vacation pay fall under the category of other remuneration. This is a one-time payment. In terms of social contributions, it is treated in the same way as vacation pay. It is worth pointing out the payment and accepting the money from the employer if it is granted. Because the one-time payments are granted in addition to the parental allowance.
Christmas bonus during pregnancy
Pregnancy is considered a special protection period during which work is performed as usual. Therefore, the Christmas bonus is drawn, regardless of the type of payment. The amount is regulated in the labor or collective agreement. Tax and social security contributions are handled unchanged.
Alternative financing options if the special payment is cancelled
No special payment during parental leave: How a loan can help?
Sometimes the German mills grind slowly. It takes time to fill out all the forms and papers. In the offices, a lot of time is usually needed for processing. Although the subsidies are granted, financial bottlenecks may occur. A loan with a short term can provide quick relief to make up for the missing special payment during parental leave or to finance the baby crib, bills or new purchases. A Vexcash small loan is available at fair conditions. The small loans are repaid within a short period of time and can be easily granted. The application process is uncomplicated and can be carried out online via WebIdent as well as by PostIdent procedure.
How can the usual special payments be compensated if they are cancelled??
During parental leave, parents receive the so-called parental allowance. This is calculated according to the last salary received and can amount to as much as 67 percent of salary. Unemployed persons, students, marginally employed persons and pupils receive a basic rate, which is at least 300 Euro. Once the application has been made, the money is usually granted without any problems. In addition, child benefits are paid for each child from the month of birth onwards. Maternity allowance is also granted in some cases. How exactly the allowances will turn out and whether the parental allowance is sufficient to secure the livelihood can only be clarified by the individual case examination.