Germany : tax tax TAX!!! How actually will I earn?

Germany is infamous for its brutal taxation. It can easily take at least 35% and over 55% of your income.

For example, if you’re a single, you have to pay 49.7% of your gross salary for tax, it is way higher than OECD’s average, 36%.

Well, as a matter of fact, I panicked quite a lot and lost when I was on the salary negotiation phase with a German company for the first time.

There’re so many types of taxes in Germany – even  Dog tax (Germany is probably the only nation that charge tax for a pet), Church tax and Solidarity surcharge (for Germany’s reunification) – and general taxes such as income tax. Plus extra deduction for pension, health care and etc.

Therefore, it’s really important to know your net salary (the amount after tax deduction from your gross salary). If you sign a job contract checking just a Gross salary, you might find yourself giving up the lifestyle you enjoyed in your own country.

Then, how can we get our net salary estimation? Below site provices quick and quite accurate net salary estimation for you.

In Germany we have 5 different tax classes, thus, knowing your tax class is essential to get more accurate net salary projection.

Tax classDefinition (Marital status)
Steuerklasse 1a single, widow(er), separated/divorced
Steuerklasse 2a single parent
Steuerklasse 3married, a higher income than your partner in Steuerklasse 5
Steuerklasse 4married with both equivalent income
Steuerklasse 5married, a lower income than your partner in Steuerklasse 3
Steuerklasse 6The class used for additional jobs (Nebenjob or Zweitjob)

If I am a single,30 years old earning 2800 euros per month (Gross) in Berlin, you can put / select your information, Here, tax class 1 is applied!

Then, you can get the idea that your net salary will be only 1850 euros after all tax. Yes, 1000 euros (36% of your gross salary) wil be deducted every month.

[ Net Salary calculation example : Gross 2800 euros -> Net 1800 euros]

Then, if you are married with a spouse earns for example 1500 euros per month. Then you’ll belong to Tax class 3 and your spouse to Tax class 5.

[You : Tax class 3]

Your net salary would be approximately 300 euros higher every month in this case!

[Your spouse with lower income: Tax 5]

As you can see you’ll eligible for a lot ower tax rate whencmpared with your spouse with lower salary gets higher rate. As a result, the total net earning of your couple will go up as you (higher income earner) pays less tax.

Overall, German tax system is more beneficial for a married couple than a single, Moreover, if you have kids, it is even better.

If you work here in Germany doing your tax duty, you can ask for Kindergeld – Child care benefit of Germany.

They can run from from €194 (For your 1st and 2nd baby) to €225(from the 3rd kid) each month, this will last till your kids turn 18 years old – and even till 25 years old if the kid meets some condition for extension, for example, still in a school.

So, make sure if you conduct the thorough research regarding your estimated monthly disporsal income – your net salary and additional benefits – to gauge your lifestyle here in Germany.

As I wrote in my previous post, the living cost (especially, the rent!) varies from city to city, so make sure to do research for the particular city you’re going !! 🙂

Leave a Reply

Your email address will not be published. Required fields are marked *