What taxes are deducted from wages in Germany

The taxation system in Germany is quite complex, but below is general information about the taxes that are deducted from wages.

Main types of taxes

• Personal income tax (Einkommensteuer): This is the main tax paid on wages. The tax rate depends on your income level and tax class.
• Social security contributions (Sozialversicherungsbeiträge): These contributions include pension insurance, health insurance, unemployment insurance, and accident insurance. They usually amount to about 19.6% of your gross salary.
• Church tax (Kirchensteuer): This tax is paid by members of the Catholic or Protestant church. The tax rate depends on your federal state and income level.

Taxation classes

There are six tax classes in Germany:

• Class I: For married couples filing a joint return.
• Class II: For married couples filing separate returns.
• Class III: For single parents.
• Class IV: For unmarried childless individuals.
• Class V: For unmarried with one or more children.
• Class VI: For individuals with a high income.

How the tax is calculated

Your personal income tax is calculated based on your gross salary, tax bracket, and standard deductions. You can use online calculators to calculate your tax.

Calculating taxes in Germany: example

Gross salary: 2500 euros

Tax calculation:

1. Social contributions:
   • Pension insurance: 9,35% (of gross) = 233,75 euros
   • Health insurance: 14.6% (of gross) = 361 euros
   • Unemployment insurance: 1.5% (of gross) = 37.5 euros
   • Accident insurance: 1.3% (of gross) = 32.5 euros

Total: 664.75 euros

1. Income tax:
   • Depends on the employee’s tax class. For example, let’s take tax class I (the most common).
   • You can calculate income tax using online calculators, for example: https://www.nettolohn.de/

Total: Approximately 500 euros (depending on personal circumstances)

Net salary:

2500 euros (gross) – 664.75 euros (social contributions) – 500 euros (income tax) = 1335.25 euros

Important:

• This is just an example, and the actual amount of taxes may vary.
• Do not forget to take into account other factors such as allowances, benefits, marital status, etc.
• For exact information about your salary and taxes, it is recommended to contact your employer or the German tax office.

Useful resources

• Federal Ministry of Finance: https://www.bundesfinanzministerium.de/
• Federal Tax Office: https://de.wikipedia.org/wiki/Bundesfinanzdirektion
• Lohnvergleich: https://www.wearedevelopers.com/magazine/germany-average-salary