Tax Breakdown in Germany
|Salary Before Tax|
|Total Tax Due|
|Salary After Tax||Enter salary|
|Long-Term Care Insurance|
|Your Take-Home Pay:|
|Your Gross Salary:|
|Effective Tax Rate:|
|Tax Deadline:||31 Oct|
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How to Use the Tax Calculator for Germany
Our German tax calculator (Steuerrechner) can estimate your take-home salary and total taxes due in just a few clicks. All you have to do is select the federal state in which you reside and then enter your gross income. Once you press "Calculate", the calculator will return your net salary (Brutto-Netto-Rechner) along with a breakdown of tax expenses.
To make our tax calculator for Germany as quick and accessible as possible, we had to make a few assumptions with tax implications, such as that you aren't married and have no dependents. We also assume you aren't affiliated with a church. That means you may end up paying more or potentially less in taxes once your circumstances and deductions are applied.
How Is German Income Tax Calculated?
Germany's income tax system is managed by the Federal Central Tax Office (Bundeszentralamt für Steuern, BZSt) and hundreds of smaller regional tax offices (Finanzämter). Major tax expenses include Income Tax, Solidarity Tax, and Social Insurances. We'll break those down in the Taxes in Germany section.
Germany uses a progressive tax rate, which means your rate will increase as your income increases. This ranges from 0% for the lowest incomes to 45% for the highest. For more information, read our section on Tax Rates in Germany 2022.
Your tax situation is also determined by your residency status. As a rule of thumb:
- Tax Residents have lived in Germany for at least six months in a given tax year or own a permanent residence in Germany. As a tax resident, you're taxed on your worldwide income.
- Tax Non-Residents have lived in Germany for fewer than six months and do not have a permanent residence in the country. As a non-resident, you're taxed only on income generated within Germany.
How Is Tax Paid in Germany?
If you're a full-time employee, then income tax in Germany is deducted "at source", meaning it's taken out of your paychecks by your employer. If your employment situation is a bit more complicated, such as having multiple jobs, being self-employed, or running your own business, then you must calculate and file your own taxes.
If you need to submit a tax declaration for 2021, the deadline is October 31st 2022 if you file without the help of a tax advisor, or August 31st 2023 otherwise. You can file a tax declaration by using the official online form ELSTER (Elektronische Steuererklärung), hiring a tax advisor, joining a tax assistance association (Lohnsteuerhilfeverein), or using third-party software. You can quickly estimate your taxes using our German tax calculator above!
What Deductible Expenses Are Available in Germany?
When you claim a tax deduction, it decreases the amount of your income that's subject to tax.
Everyone who is employed and pays income tax in Germany is eligible for a €1,000 deduction for "employment expenses", which is automatically applied by your local tax office (Finanzamt) — if you want to claim more than this, you must provide proof by filing a tax return.
Other deductible expenses, some of which may already fall into the employment expenses described above, are:
- Commuting Costs (Fahrtkosten) can be deducted at a flat rate of €0.35 per kilometer, but this only applies during your one-way commute to work.
- Home Office (Arbeitszimmer) expenses can be deducted at full-cost if the home office is your main workplace. Up to €1,250 can be deducted subject to certain conditions.
- Telephone and Internet Costs can be partially deducted if you rely on these services for professional activities.
- Childcare Expenses (Kinderbetreuung) can be deducted at two-thirds of their full cost for each child under 14. This deduction is capped at €4,000 per child.
- Mortgage Allowance allows you to deduct mortgage interest from rental income on a property you're letting out (not applicable for a property you live in).
- Pension Contributions (Vorsorgeaufwendungen) are deductible as special expenses (Sonderausgaben). Your pension contributions should be automatically deducted by your employer.
- Health-Related Deductions can also be claimed as long as they're primary care health insurance premiums.
- Education Allowance lets you deduct €924 for children older than 18 years enrolled in school, as long as they aren't living at home.
How Much Tax Do Germans Usually Pay?
To give you a better idea about Germany's income tax, we compiled a table of the median salary, effective tax rate, and take-home pay of inhabitants in some of the wealthiest federal states (in terms of gross regional product, GRP).
For instance, according to 2022 figures Berlin has the lowest median salary (€42,224) and take-home pay (€27,878), resulting in an effective tax rate of 34%. The city-state is followed closely by North Rhine-Westphalia, with a gross median salary of €43,940 (€28,814 after tax) and the same 34% tax rate.
On the other end of the spectrum, Baden-Württemberg and Hessen have the highest median salaries on the table (€47,806 and €47,840, respectively), thanks in large part to cities like Stuttgart and Frankfurt which boast some of the highest average wages in the country. The state of Bavaria has the same median salary as Hamburg (€46,800), despite the fact that Munich, Bavaria's capital city, has one of the highest average salaries in Germany.
To take a closer look at industry-average salaries, minimum wage, estimated take-home pay, and living expenses in major German cities, visit our Salary Calculator for Germany!
|State||Gross Median Salary||Take-Home Pay||Effective Tax Rate|
Taxes in Germany
Our German tax calculator accounts for the four major expenses you can expect to pay come tax day. However, as we mentioned earlier, we didn't include the Church Tax, which is only relevant if you're a member of a church. Here's an overview of each expense:
German Income Tax (Lohnsteuer)
Everyone who generates an income in Germany must pay taxes. Depending on your residency status (see How is Income Tax Calculated in Germany?), you either owe taxes on worldwide or just country-specific income. Germany's progressive tax rate ranges from 0% for incomes below €10,347 up to 45% for the highest salaries.
Solidarity Surcharge (Solidaritätszuschlag)
The Solidarity Surcharge, or Soli, as it is called informally, goes toward improving infrastructure and the economic situation nationwide. As of 2021, the Solidarity Surcharge is no longer applied to individuals whose income tax burden is less than €16,956 (or €33,912 for married couples). However, if you do fall in that income range, then you have to pay the surcharge which starts at 11.9% and then gets capped at 5.5%.
Pension Insurance (Rentenversicherung)
Pension insurance contributions must be made as well. This ensures you'll be able to afford skiing expenses once you're no longer working :-). The total contribution rate is 18.6%, but it's split with your employer, so you only pay 9.3%.
Unemployment Insurance (Arbeitslosenversicherung)
You should also expect mandatory contributions to unemployment insurance. This ensures that people who are unemployed are taken care of while they're in-training or job-seeking. All-in-all, the contribution rate is 2.4%, but it's shared with your employer. That means you only pay 1.2% — and your employer pays the other half.
Health Insurance (Krankenversicherung)
German taxpayers also need to think about health insurance contributions. All-in-all, the health insurance contribution rate is 14.6%, but like other Social Insurance contributions, it's shared between your employer and you. Your employer pays half (7.3%), and you pay the other half. Depending on your health insurance, there is an additional contribution which averages 1.3%.
Long-Term Care Insurance (Pflegeversicherung)
Long-term care insurance contributions ensure that everyone can receive long-term nursing care if they need to. This makes it easier to afford care if you have an accident, are diagnosed with an illness, or just reach old age and need help. The long-term care insurance is a mandatory contribution ranging between 3.05% and 3.4%, with the employer paying 1.025% or 1.525% depending on the state.
Tax Rates in Germany for 2022
Income tax in Germany can get a bit confusing, so we put together a table with the 2022 tax brackets. You can see Germany's progressive tax rates in action here. Notice the 0% tax rate for all individuals earning less than €10,347. Then, from €10,348 all the way up to €58,596, it scales from 14% to 42%. That's as high as the rate goes until you make more than €277,826, at which time you're subject to a 45% tax rate. Ready to see what you owe? Scroll up to use our tax calculator for Germany!
|German Income Tax|
|Taxable Income||Rate Applied|
|€0 to €10,347||0%|
|€10,348 to €58,596||14% to 42%|
|€58,597 to €277,825||42%|
|€277,826 or more||45%|