ELStAM - What Does It Mean?

Why do so few people want to deal with filing their tax return? Could it have to do with them not wanting to provide information on their financial situation to public authorities? Or maybe they simply don’t want to talk openly about money? Or, just maybe, they don’t know where to start when it comes to their tax return?

There could be numerous reasons to procrastinate filing a tax return – it may seem easier to just not complete it at all, but then there would be missed chances to a beneficial tax refund.

Some people just dread dealing with the terminology and technical jargon. Let’s start with the basics – many people don’t know what the abbreviation “ELStAM stands for” – we will clear all of this up in this article.

Background and origin of ELStAM

“Income tax cards” (Lohnsteuerkarten) as they were known haven’t existed for many years. From 1925, employees had to have a paper wage tax card but they were last distributed in paper in 2010 and could still be used for work up until 2013. The card recorded personal details such as one’s name, religion, tax class, and local tax office (Finanzamt) and was used to carry out the wage tax deduction procedure.

Employees had to present these cards to their employer at the beginning of each year as they included additional data that assisted with wage tax calculation such as address, birth date, child allowances (Kinderfreibeträge), municipality code, identification number, etc. These cards have been withdrawn and fully replaced by an electronic version.

The new electronic model was named “Electronic Wage Tax Deduction Details” AKA ELStAM (Short for the German: Elektronische Lohnsteuerabzugsmerkmale) – it can be more commonly referred to simply as “electronic wage tax card” (elektronische Lohnsteuerkarte).

This model has been used since the beginning of 2013 and the conventional paper income tax cards were completely gone by the end of 2014. To use the new, electronic model, employers need a special software and all operational processes must be adjusted for that.

Information included on ELStAM

ELStAM is a database for the tax authorities (Finanzverwaltung) that stores information about employees. Some of this information include:

• Tax class (Steuerklasse)
• Number of child allowances
• Religion
• Name, date of birth, etc.
• …

This data is protected by very high security precautions and only your current employer can access those records. Employees have the option to allow several employers to access the data, and certain companies can also be blocked from it. Blocking companies could result in the employee being taxed according to tax class VI.