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Short-time work in times of Corona (COVID-19)

How much short-time work compensation can you get? How can companies apply for this?

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* Federal State your place of work is located in


Normal Monthly Gross Income
Normal Monthly Net Income


Reduced Monthly Gross Income
Reduced Monthly Net Income
Net Difference
Compensation Rate
Short-time Compensation [Kug]

Total income

All information is without guarantee of correctness and completeness and does not represent tax or legal advice.

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Basic Facts —




Your employer is having problems because of the corona crisis?

Short-time work means that some or all of a company's employees have to work shorter hours because of absenteeism. In some cases, you may not work at all for a certain period of time.
In order to ensure that your salary continues to be paid, the state has reintroduced the short-time work allowance (Kug) [Kurzarbeitergeld].
In this case, your employer pays your salary first, but then receives Kug back from the government.

The last time the Kug was introduced was during the financial crisis in 2008, in order to save jobs. Now, in times of Covid-19, this allowance is supposed to ensure that you can pay your bills even though your employer cannot employ you fully.

If you want to know how much Kug you are entitled to, use our short-time work allowance calculator.

Here are a few answers that we hope will be helpful to you…

How do I get the short-time work compensation (Kug)? —

Your employer must contact the employment agency to receive Kug, and fill in and submit certain forms. If your company has a works council, it also needs to approve. If you do not have a collective agreement on short-time work in your company, the employees must agree to the short-time work compensation individually.

Your employer will then agree with you by what percentage your working hours are to be reduced. This can be different from person to person, for example one person works only 30 %, another colleague 70 %.

The proportion of employees who must be affected by absenteeism in the company is to be reduced to up to 10 %. Previously, at least one third of the employees had to be affected by a loss of earnings exceeding 10%
It is also important to note that not the whole company has to work short-time; only part of your company can do so. Your employer must first fill in a form and inform the BfA, followed by an application to receive Kug.

Who can receive short-time work compensation? —

It is important that you have not yet been dismissed, otherwise you will not receive Kug. Nor should you have signed a termination agreement.

Pensioners, trainees, mini-jobbers or people receiving sickness benefits are also excluded.
However, temporary workers are entitled to Kug.

Even if you have financial reserves, you do not have to declare them or use them up as long as they are not considerable.

Last Updated: 24.04.2020

The Economy in Trouble

The corona virus does not just have an effect on individuals' health but also a huge impact on the economy. We put together some information for companies that are currently struggling to keep their employees fully employed.
Employers can apply to the Federal Employment Agency [Bundesagentur für Arbeit; short: BfA] for short-time work compensation [Kurzarbeitergeld; short: Kug] for their employees if these are currently working less or not at all.

Requirements —

Good reasons for a approval are if the company has to be temporarily closed by government orders or if working hours have to be reduced due to missing deliveries.

First of all, the company in question must notify the BfA of the short-time work online.
Then, the Federal Agency must determine whether the conditions for Kug are met. If this is the case, the Kug can be applied for online.

So first, there is the online notification, then the online application.

Due to the economic problems caused by Corona, the BfA has changed and facilitated the reasons for granting a licence, thus trying to avoid dismissals.
Pure financial losses cannot be compensated by the Kug. The entitlement to state support is based on different conditions:

  • If at least 10 % of the employees have a loss of earnings of more than 10 %. Low-income earners are to be counted, apprentices are not
  • Kug is possible in all companies that have hired at least one person liable to social insurance
  • Only employees who have not yet been dismissed and who have not signed a termination agreement are supported by short-time working compensation
  • Social security contributions for lost working hours are reimbursed at 100 %
  • Temporary workers can also go into short-time work and receive Kug
  • The introduction of minus hours to avoid Kug is not necessary
  • The employer must try to avoid short-time work, e.g. by changing the distribution of tasks, clearing up stocks and reducing saved up working hours
  • The short-time working period must be unavoidable and temporary
  • It is possible to apply for funds for one department only, while the others continue to operate normally
The application for short-time work must be submitted within the month in which it first occurs. It is important that the loss is not customary in the industry, customary in the company or seasonal.

How do I proceed? —

If you want to apply for short-time work compensation (Kug), you must inform your employees in advance. Often an agreement is then reached with the works council. If your company does not have a works council, all employees affected by the regulation must agree. It is important that certain collectively agreed entitlements and deadlines are adhered to when making the announcement.

The next step: Now you can select the BfA at your company headquarters.

  1. First, there is the online notification, here the form (in German)*: https://www.arbeitsagentur.de/datei/anzeige-kug101_ba013134.pdf

    We put together a rough translation of the document which you can find here.

  2. Then follows the online application, again the application (in German)*: https://www.arbeitsagentur.de/datei/antrag-kug107_ba015344.pdf

    We put together a rough translation of the document which you can find here.

If the BfA approves your application, you can calculate the Kug. For this calculation you can use the services of software providers or tax consultants.

After all, you pay your employees for the work they have done, and you also pay the Kug. You apply for reimbursement of the short-time work allowance monthly in arrears.
This so-called benefit application must be received by the BfA at the latest three months after the end of the respective accounting month. The duration of short-time work is currently limited to twelve months. If you can suspend short-time work for one or more months, the duration of the possible short-time work will be postponed. If short-time work is interrupted for three consecutive months, a new notification must be submitted to the BfA.

If you have regulations on working time accounts, attach them to the company agreement on short-time work. For employees with at least one child, the amount of the reduced hours compensation (Kug) is approximately 67% of the flat-rate net remuneration. For employees without children, it is approx. 60% of the net salary.

As soon as you are able to employ your employees normally again, the BfA checks the payments made again and corrects them, if necessary, in the course of a final examination.
If you have any further questions, you can find the BfA FAQ here (in German)*:
Here is a very small info page on short-time work in English here*:

And here is a detailed information sheet (in German)*:

*Should you know of any official sources with more English content, we would be grateful if you would drop us a line at kontakt@steuerberater.com.

Last Updated: 29.03.2020