No. Your expenses are allowable in Ireland to reduce the amount of PAYE tax and USC to be paid, however they are not allowable in Germany when calculating the amount of Social Insurance deductions due. This is the decision of the German government and we have no control over this rule.
We will always aim to maximize the use of your expenses so as to not waste them when they are not required. The idea behind this is to retain as many as possible should you be moved to a different country home base in the future and can take full advantage of your expenses.
You might still pay a small amount of PAYE/USC but it is nothing to worry about. Any tax deducted will most likely be refunded to you in your annual tax return anyway. We will adjust your basic pay (taxable pay) every month to make sure you are fully using your tax credit and allowances in Ireland while paying as little PAYE as possible but you might still pay a bit of USC (so if you see that your taxable pay is different each month, this is why). Were we to use additional expenses, you might be able not to pay USC but we would be wasting a lot of expenses to save a few Euro of USC.
As mentioned previously, the expenses do not go towards calculating your Social Insurance so they only reduce your PAYE and USC. To use any more would waste the expenses unnecessarily for no additional take home pay.
- Can I set my basic pay (taxable pay) to be as little as it can be and have the rest as expenses? Yes but you could be wasting a lot of expenses as they are not allowable in Germany to reduce the amount of social insurance you pay. Therefore, your net salary will not increase much and you could be wasting a lot of expenses unnecessarily. As mentioned before, we will adjust your taxable pay every month to make sure you are fully using your tax credit and allowances in Ireland while paying as little PAYE as possible but you might still pay a bit of USC (so if you see that your taxable pay is different each month, this is why).