If you are working in Germany, you might ask yourself what is my net salary after the taxes and social contributions are deducted? The tax system in Germany is rather complex.
Your income tax is determined by your tax class. There are seven different tax classes in Germany. Don’t know which to pick? I will explain what they are and what they mean.
Every employee is assigned a tax class by the tax office. The tax bracket you are in is determined primarily by your marital status: single, single parent, or married an it can be one of the following
- Class I: Single, widowed, civil partnership, divorced, spouse living abroad, or legally separated.
- Class II: Single parents.
- Class III: Married, one spouse has a significantly higher income than the other spouse and lives in Germany.
- Class IV: Married, both spouses have similar wages, reside in Germany, and are not separated.
- Class V: Married, but one of them, at the request of both spouses, is classified as tax Class III.
- Class VI: Workers who receive multiple wages from multiple employers.
If you are married you can choose between the tax class combinations of IV/IV and III/V. Visual Smart provides a comprehensive calculator, breakdown of your tax and social contributions, as well as diagrams and plots which help you to understand the German income tax system. You can use the households income calculator (or Haushaltseinkommens-Rechner in German) to determine your and your partner’s combine monthly net income.
If you are in another category, then you can use the Net Salary Calculator (or Brutto Netto Rechner in German) to evaluate how your monthly or yearly gross salary translates into net income in Germany.
The tax class you choose is only relevant for withholding tax and, as a result, for income that is immediately available. After an income tax assessment is made a few months after the end of the tax year, the choice of tax class has no effect on tax refunds.