INFOYER I German Wiki - Taxes in Germany

The German tax system is very complex. There are a variety of deductions, special exceptions, tax relief for families and many more.

Taxes in Germany: Incoming Tax (Einkommenssteuer)

The income tax is dependent on your income. The higher the income, the higher taxes are payable. Each employee and self-employed is obliged to make an annual income tax.

For all citizens in Germany a basic allowance applies. For Unmarried the basic allowance amounts to 8.354 €. For married amounts to 16.708 € since 2014. As far as the taxable income is from the corresponding amounts, income tax is paid on it. The rates are 14-45%.
This applies: The higher your taxable income, the higher the tax rate. The top rate of 45% you have to pay only for a taxable income over 250.730 € a year and if you are not married. For married the maximum rate applies from an income of about 501.460 €.

You have to give your tax card (Lohnsteuerkarte), which was sent to you after you are registered in Germany, to your employer. At the end of the year, you will get the tax card back (from your employer). Your employer gives you also all necessary informations for your income tax return (Steuererklärung). Together with the tax return, the tax card must be returned to the tax office (Finanzamt). The registration deadline is the end of May of the year after to be considered tax year.
Example: You have to do the tax return for the year 2015. Than income tax must be received until 31.05.2016 at the tax office (Finanzamt).
But it is also possible to obtain an extension.

The appropriate forms for your tax return will be given to you at your local tax office. You have also the opportunity to complete the tax return online - named Elster Service.

For more informations about Elster Service, please click here.
For more informations about tax office, please click here.

In addition, the employer shall pay the solidarity surcharge and church tax (only if you are a member of a church tax collected religious community.).
In addition, the pension, health, and unemployment insurance is deducted and paid to the relevant government authorities (tax office, health insurance, etc.). How much your net salary is, you can see every month of your payroll.

Taxes in Germany: Tax Class

The amount of income tax is based on the income and your family. All taxpayers are divided into different wage tax brackets:

class I

class II
single parent (living alone with the child/children)

class III
married and spouse has no income or lower income

class IV
married and similar income to spouse

class V
opposite of class III, ie this is the class your lower earning spouse has if you have III

class VI
for a second job or for deduction without proper employee information

Taxes in Germany: Retirement, Unemployment and Nursing Care Insurance

19.5 % of your monthly income will be paid for your retirement insurance (Rentenversicherung). Unemployment insurance (Arbeitslosengeldversicherung) amounted to 6.5 percent of your gross revenue, while the long-term care insurance (Pflegeversicherung) represents 1.7 % or 1.95 % for taxpayers who do not have children.

Taxes in Germany: Solidarity Surcharge

The so-called solidarity surcharge (Solidaritätszuschlag) is levied at a rate of 5.5% of the income tax for higher incomes.

Taxes in Germany: Church Tax

If you are member of either the Catholic or Protestant church, you will
also be liable for tax equal to 8-9 % of the income tax you pay.