Taxes in Germany

Germany has one of the highest tax rates in the world. Good for you, that Germany also offers a lot of tricks to lower your bills for taxes in Germany. You can save thousands of Euros every year!

Taxes in Germany - Get some back

Taxes are very common in Europe, especially in Germany. As PerFinEx we want you to be an expert when it comes to taxes in Germany, so that you know the German tax system even better than German natives. In the following, you will learn how to actually file your tax declaration, how you can get some more money back from your gross salary and also a lot of other important stuff to know about taxes in Germany.

German Tax Guide 2022

Tax Guide 2022

  • For most people a tax declaration is not mandatory
  • Almost all kind of income will be taxed. Some is deductible
  • Required infos are for example your Lohnsteuerbescheinigung

legal tax tricks

  • By filing your taxes you will get 1.051€ on average back
  • You can get a lot of money back by investing in pensions
  • Learn a lot more tax tricks in the following 

More net income

  • Learn five different tips to get more net income in Germany
  • Get more by asking your employer some exact questions

taxes in Germany - Your Personal Situation

Every employee has his/her own individual tax rate. But do you actually know what your personal tax rate is, or do you know how much taxes in Germany you have to pay as a self-employed person? In the following articles, you will find everything about your personal tax situation in Germany.

Income Tax Explained

  • There are tax classes which will be differently taxed in Germany
  • You have a marginal and an average income tax rate
  • Which other deductions are also counting as taxes?

taxes as an employee

  • Married people will be differently taxed than single people
  • There is a maximum tax rate for employees
  • You also have to pay church taxes in Germany

taxes as Self-Employed

  • Nearly all tax classes pay differently
  • Only tax class one and four counts equal
  • Choose, if you want deductions for the social security system

Our "Taxes In Germany" YouTube Playlist

Every week we publish at least 1 video on our PerFinEx YouTube channel on all things personal finance in Germany. Below you can find our playlist that contains all videos related to German taxes in Germany. That is all you need to bring your personal tax game to the next level.

Tax Calculators

Are you looking for calculators to get some taxes in Germany back? Our tax calculators will help you in some common tax questions. 

Tax Return Estimator

Germany has one of the highest tax rates in the world. Estimate the tax refunds you can receive when filing your taxes in Germany.

Income Tax Calculator

Germany has one of the highest tax rates in the world. Calculate the income tax, solidarity tax & church tax you have to pay in Germany based on your income.

Kurzarbeit Calculator

During Kurzarbeit you will earn a lower gross salary. How will your net salary change and what are the tax implications? Find out with our Kurzarbeit calculator.

Solidarity Tax Calculator

Since the solidarity tax reform in 2021 about 90% of German taxpayers save hundreds of Euros because they do not pay solidarity tax anymore. How much do you have to pay?

FAQ

In Germany, you have to pay a progressive tax rate. This means that your personal tax rate increases as your income rises. The beginning of the income tax rate is in the zero zone, the basic tax-free amount (10.347€ in 2022). No income tax is due here. After that, the income tax rate starts at 14% and goes up to 42%, which starts at an income of 58,827€. This 42% applies up to an amount of 277,826€. From here the top tax rate of 45% on your income starts.

The tax system in Germany works similarly to how it does in other, westernized countries. You are required to pay income taxes. This is automatically deducted from your payslip by your employer on a monthly basis throughout the year. Afterwards, a tax declaration is typically filed, or adjustments are made to reconcile any discrepancies.

  1. Capital-forming Benefits
  2. Non-cash Benefits
  3. Optimize your health insurance
  4. Leave the church
  5. File your tax declaration

You can find an exact explanation in our article or YouTube Video.

  1. Single, separated/divorced, widowed
  2. Single parent, living separately
  3. A married person with high income (spouse has to be 5)
  4. A married couple with equal/similar income
  5. A married person with no or low income (spouse has to be 3)
  6. 2nd job or part-time

For some groups in Germany, filing a tax return is mandatory. These are self-employed and freelancers. It is also mandatory for you, if you are an employee and are in tax class 3, 4, or 5, you have divorced and remarried in the same year, additional income or salary replacement income over 450€, more than one employer in the same year, or with more than two salaries. For the other areas it is not obligatory, but can be useful, since 9 out of 10 people get on average 1.051€ back in taxes.

In Germany, no tax burden applies up to an annual income of €10.347 (in 2022). This is called the zero zone. After that, the lower progression zone begins, starting at 10.348€ and ending at 14.926€. The tax burden is 14% - 24%. The middle progression zone runs from 14.927€ to 58.827€ with a tax burden of 24% to 42%. The upper progression zone, with a tax burden of 42%, runs from 58.828€ to 277.826€. Then the proportional zone starts from 277.827€ with an annual tax burden of 45%.

Our service and contact

Personal finance in Germany can be difficult – especially as an expat with limited German language skills. We make your financial planning as easy as possible. All you need is a device that is connected to the internet to secure a free online meeting with us.

Reach out to us and secure a free 30-minute online meeting with us.