Last Update: 19 May 2024
1. What are Income Taxes and Social Security Charges in Germany?
The following charges are obligatory for employees in Germany and will directly be deducted from your payouts (values are for 2024 and related to gross salary):
- Statutory pension insurance (Rentenversicherung): 9.3% (max. contribution is capped for monthly incomes higher than 7.450 in East and 7.550 Euro in West Germany)
- Statutory health insurance (Krankenversicherung): 7.3% + additional contribution (average 0.85% depending on your health insurance provider); max. contribution is capped for monthly incomes higher than 5.175 Euro
- Long-term care insurance (Pflegeversicherung): 1.7% and 2.2% in state of Saxonia (max. contribution is capped for monthly incomes higher than 5.175 Euro). There is a supplement of 0.6% for individuals 23 or older without children.
- Statutory unemployment insurance (Arbeitslosenversicherung): 1.3% (max. contribution is capped for monthly incomes higher than 7.450 in East and 7.550 Euro in West Germany)
- Income tax (Lohnssteuer): Progressive tax rate between 0% and 45%. For employees with a yearly income of 11.604 € or lower (23.208 € for married employees) the tax rate is 0%.
- Solidarity Surcharge (Solidaritätszuschlag): Between 0 and 5.5% of income tax due
The above mentioned social security charges are related to employees. The employer takes over the remaining amount – in case you are self-employed you will have to pay the full amount. This one is usually double the contribution. There is also exceptions for so-called mini-jobs with employees earning up to 538 Euro and paying reduced charges.
2. Which is my German Tax Class (Steuerklasse)?
The German Wage Tax System classifies individuals into six distinct Tax Categories based on their living circumstances:
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Tax Category I: Applies to singles, separated individuals, or married couples not residing together, falling outside Categories II or III.
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Tax Category II: Designed for single or separated individuals living with their child, eligible for a child’s allowance.
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Tax Category III: Suited for married couples cohabiting, especially beneficial when one spouse has a high income and the other has little or no income. Ideally, the lower-earning spouse is in Tax Category V, while the other is in Tax Category III.
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Tax Category IV: Tailored for married couples living together, particularly advantageous when both spouses earn similar wages, assigning both to Tax Category IV.
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Tax Category V: Applicable to married couples living together, with one spouse under Tax Category III (for more details, refer to Tax Category III).
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Tax Category VI: Pertaining to employees with multiple employers and varying incomes, requiring a second, third, etc., tax card of Tax Category VI. Ideally, the lower-paying employment is assigned Tax Category VI.
3. How to use the net / gross salary calculator?
The gross / net salary calculator supports you in calculating your net wage for the current and previous years. It calculates all taxes, obligatory charges and contributions like social security.
- Ihr Einkommen (Brutto): Enter your gross salary:
- Abrechnungszeitraum: Choose whether you entered your salary on a yearly (Jahr) or monthly (Monat) basis
- Geldwerter Vorteil: Add the value of non-cash contributions you receive from your employer and are subject to taxation (e.g. a company car). Please note that this should always be the monthly value.
- Abrechnungsjahr: Choose the year of the analysis (e.g. 2024)
- Steuerfreibetrag: Add here the yearly value if you declared any tax exemptions to your local tax authority (e.g. for communiting). As a standard this value is 0.
- Steuerklasse: Add your tax class here. You can find a description of the tax classes below. The standard tax class for single, non-married people without children is tax class 1. (Klasse 1).
- Sie sind in der Kirche? Choose yes (ja) if you stated yourself member of a church when registering. The biggest communities are catholic, protestant and jewish. Muslim communities do not pay church text – in this case choose no.
- Bundesland: Choose the federal state of your workplace
- Sie haben Kinder? State here whether you have children (ja) or not (nein)
- Kinderfreibetrag: Add your tax free child allowance here. This value, you can get from the local tax office
- Ihr Alter: Your age
- Krankenversicherung: Choose whether you have statutory (gesetzlich versichert) or private health insurance (privat versichert)
- KV-Zusatzbeitrag: If you are in a statutory health insurance, add the additional allowance of your health insurance. In 2024 the standard value is 1.7%.
- Monatlicher Beitrag zur PKV / Arbeitgeberzuschuss zur PKV: If you are privately insured, enter your monthly contribution and select whether your employer grants you allowance to your health insurance (ja) or not (nein)
- Rentenversicherung: State whether you are in the statutory pension insurance – this is the standard case (gesetzlich versichert) or not (nicht gesetzlich versichert)
- Arbeitslosenversicherung: State whether you are in the statutory pension insurance – this is the standard case (gesetzlich versichert) or not (nicht gesetzlich versichert)
- Berechnen: Click the button to calculate your result. You will see the monthly and yearly net amount (Netto)
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Disclaimer:
The information in this post is non-binding and for informational purposes only. We do not take responsibility for the accuracy and up-to-dateness of the data. (§18 ZKG).
We do not intend to provide financial or tax advice.
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