Cash Shortage Allowance

What is the cash shortage allowance?

In practice, “Mankogeld” is the common term for a cash shortage allowance (Fehlgeldentschädigung). It refers to an additional payment to employees in cash handling and counting roles, that is, to people who regularly accept cash, manage change, or count cash balances. Under employment law, the topic is often considered together with a so-called cash shortage agreement (Mankoabrede), that is, contractual provisions on liability and cash discrepancies.

Why do companies use this benefit?

Companies use the cash shortage allowance primarily when certain roles involve special responsibility for cash. The benefit is therefore not a general component for the entire workforce, but a targeted benefit for positions in which cash handling is part of everyday work. This is exactly what the wage tax guidance of the German Federal Ministry of Finance (BMF) refers to when it speaks of employees in cash handling and counting roles.

In everyday business, the cash shortage allowance can help make responsibility visible and place the handling of minor cash discrepancies within a transparent system. Especially in environments with recurring cash processes, a clearly defined compensation component is often more practical than case-by-case solutions, because responsibilities, payroll, and internal communication fit together better. The IHK (Chamber of Industry and Commerce) fact sheets on this topic show that cash shortage allowances are closely linked under employment law to questions of liability for shortages and the specific organization of access to the cash register.

For HR and benefit advisors, the cash shortage allowance is therefore interesting above all as a precisely tailored, role-specific benefit. It is more suitable as a supplement for certain activities than as a universal benefit component, and its practical value is greatest where companies want to structure cash responsibility deliberately and transparently. This assessment is a natural conclusion from the official restriction to cash handling and counting roles and from the link under employment law to specific areas of responsibility.

Benefits at a glance

In practice

The cash shortage allowance is most often considered where employees regularly operate a cash register or manage cash holdings. Typical contexts are therefore branch networks, retail floors, service points, or other organizations with ongoing cash handling and counting duties. The practical relevance of the benefit in the retail environment is also evident in labor court cases and collective bargaining-related cases involving cashiers.

What to keep in mind

With the cash shortage allowance, the tax, social security, and employment law framework should always be considered together. The German Federal Ministry of Finance currently specifies a monthly limit of 16 euros for flat-rate cash shortage allowances in cash handling and counting roles; the Deutsche Rentenversicherung (German pension insurance) applies the same figure for classification under social security contribution law. Under employment law, it is also examined whether and how a cash shortage agreement is structured, for example with regard to clear agreements, appropriate compensation, and sole control over cash or inventory. You should therefore always review the specific implementation together with tax advisors, payroll, and, where applicable, employment law experts.

Sources & further information

• German Federal Ministry of Finance – Wage tax guidance on wages and cash shortage allowances
• German Federal Ministry of Finance – Tabular overview of Section 19 EStG
• Deutsche Rentenversicherung – Remuneration under Section 14 of the German Social Code, Book IV (SGB IV)
• Gesetze im Internet – Section 19 of the German Income Tax Act (EStG)
• Gesetze im Internet – Section 14 of the German Social Code, Book IV (SGB IV)
• IHK – Employee liability and cash shortage allowance