MSCA-ITN Salary, Tax and Social Security Contributions

Hi Asif.

First, you may have a look at the Annotated Grant Agreement (https://ec.europa.eu/research/participants/data/ref/h2020/grants_manual/amga/h2020-amga_en.pdf), that is legally binding for all contracts and your institution simply has to comply with it; it stands above the local contract-habits at the institution.

Concerning your particular situation: you should not pay the employer-half of the social/health insurance, that is by definition responsibility of the employer. They can not ask you to contribute the employer-part from your salary. However, the state total amount allocated in the table of the H2020 contract (that you can also find in the grant agreement you signed) includes deductibles of the employer for your position. That means, you will not get the exact amount that is written in the grant agreement, but it will be lower by exactly deductibles for social/health insurance and taxes. + There may be some institutional standard-deduction to any money. Meaning, the amount stated in the grant agreement represents a "super-gross" salary, that normal employees never hear off.
So, while your employer can not ask you to contribute for the employer-part of the insurance from your pocket, it will de subtracted from the budget the hospital gets from the EU for your position (they don't get anything else, it is basically to ensure they don't have to pay for your work and really all costs linked to your employment are covered by the EU - no one else than the PhD students/you get paid by that project). If you are uncertain about what exactly they mean, you could try going to the HR department and clarify it with them. It worked nicely for me and they send me the tables how my final salary was calculated, included that super-gross salary thing.

I hope you will figure it out,
cheers,
Barbara
 

Hi Asif,
What Barbara says above is correct. Page 23 of the Guide for Applicants makes it clear:

• "Important notice: Living allowance The living allowance is a gross EU contribution to the salary costs of the researcher.  Consequently, the net salary results from deducting all compulsory (employer/employee) social security contributions as well as direct taxes (e.g. income tax) from  the gross amounts. A top-up may be paid to the eligible researchers from another budget source in order to complement this contribution."

There is no requirement for the host institutions to pay the employer contribution required for pensions and health insurance from their own finances. It can all come from the grant.

The hosts can pay a top-up. In the Netherlands, PhD candidates have minimum salary levels greater than the ITN salary and a minimum of 4 years duration. ITN hosts in the Netherlands comply with the law and top-up salaries. Top-ups are not common in Germany.

All the best,

Brian

Hi Asif, 

I would like to confirm the information provided by Barbara and Brian and just draw your attention to this page: https://oeffentlicher-dienst.info/tv-l/allg/  It will help you calculate your salary and know your deductions on our own (subject to small uncertainties). The German system ist quite complicated - so you should ask one of your new German colleagues to better understand the details of the scheme.

The employer's contributions are not even visible here - they will not be entirely visible on your pay slip either. Since the German system usually distributes the burden 50/50, you can, however, extrapolate the employer's contribution: it would be about another 800 Euros for the four big standard insurances in the example linked below; plus a number of supersmall payments that most employees even are not aware of.

For the example, I chose the salary of a doctoral student (TV-L, E 13), in his first year (Stufe 1), 100 % contract, not married and no kids (income tax class/Lohnsteuerklasse 1), who does not need to contribute to the supplementary pension system (VBL=0). Please consider that there will be, most probably, a partial tax refund in 2021, when you file your income tax. https://oeffentlicher-dienst.info/c/t/rechner/tv-l/allg?id=tv-l&g=E_13&s=1&zv=VBL&z=100&zulage=&stkl=1&r=0&zkf=&kk=15.5%25

 All the best,

Jurgen

Dear Asif,

My colleagues did answer really good to your question. I will just add a small comment about what is the difference between paying from your salary or paying from your gross.

German universities and research institutions have set this up so they do not waste any euro in you. The total cost for your research comes from the EU.  In the end, you will perceive less money either if you pay it from your salary than if it is taken from your gross, with the exception that taking it from your gross makes that you earn less and therefore you pay fewer taxes. Thus, as it says in the guidelines it should be obtained from your funding, not your salary.

Here it comes the weirdest thing. If you have an MSCA in Germany you earn less than in any other country in Europe, just because you have to subtract your social security contributions and pension from your total budget, that lowers your salary. Thus, you can earn 1000 euros more per month just for doing the project in Switzerland or Italy.

Willkommen :)

Pablo

Dear Asif / Pablo,

What they all write is indeed correct, the employer will take all hist costs from the allowance they get from the EU. The mobility allowance is also taxed. If you have steuerklasse 1 and no family back home (your middlepoint of life moves to Germany) then it is quite expensive to do your research in Germany.

If your middlepoint of life stays in your home country (while for example your significant other lives there) and you travel back almost each weekend then your house in Germany is considerid an "Arbeitsbedingte wohnsitz" and you can deduct all associated costs from your income tax at the end of the year (this includes things like: rent, utilities, furniture, travel cost back home). You will need to prove that your middlepoint of life did not move to Germany and you need receipts for all costs you want to deduct.

Due to the fact that everything is taxed in Germany your average netto salary is higher then when the mobility allowance for example would be untaxed, this average netto is what the governement will use to calculate benefits like "Arbeitslosengeld" at the end of your PhD or "Elterngeld" when a child is born and you take up to a year where the governement pays (around 65 - 70 % of average netto) you to do so.

At the end of the month you might be better of in Italy or Switzerland, in the long run it could equal out depending on your situation and how your life develops