When you live and work in Germany, it is not that easy to calculate your net wage. In this post, I will shed some light on this so you can use the salary calculator for Germany with total confidence.

Below the salary calculator you will find the whole explanation plus a step by step guide, on how to fill in your data in the calculator.

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Deductions out of your Gross Income used in the salary calculator for Germany

In Germany, there are so many deductions from gross income that the amount left over in the end can be misleadingly high for newcomers. Why? The German tax and insurance system is quite confusing.

But you can understand it when you take some time to learn about it.

Topics in this article

Good to know before you fill in the salary calculator Germany >>

Salary Calculator Germany – Gross Net Calculator 2021 of the German Wage Tax System >>

How to use the salary calculator Germany >>

Tax classes in Germany – In which tax category in Germany do you fit in? >>

What is the difference between wage tax and income tax in Germany? >>

Can I change my tax class in Germany? >>

How to change your tax category in Germany? >>

Will you have to pay the Church tax in Germany? >>

What represents the solidarity surcharge in Germany? >>

Is there any social security contribution in Germany? >>

How much is the social insurance contribution in Germany? >>

Tax free allowance in Germany >>

Good to know before you fill in the salary calculator Germany

The German tax system can be pretty complicated as the German tax system is progressive. It starts at 1% and rises incrementally to 45%. The rate of 42%, the so-called “Spitzensteuersatz” in Germany, applies to a taxable income above 57,052 € to 270,500 € for individuals.

Tax rates incorporated in the salary calculator Germany that apply for couples

Couples may earn between 114,103 € up to 541,000 €. Unfortunately, there is no fixed tax rate in Germany that you can apply to your gross salary. This is the reason that makes the use of an income tax calculator so beneficial.

If you live abroad and are about to start salary negotiations with a German employer, using a salary calculator is a great help.

Especially if you know your fixed costs per month or the desired net salary you’d like to get.

But even if you are considering a move from one another country to Germany, you might be interested in your net salary because of the rather complicated tax system.

Two examples to explain the salary calculator Germany

I’d like to give you two examples for tax calculation based on your residence in different federal states in Germany. For both instances, I will assume a monthly gross salary of 3,500 Euros in the accounting year 2021, the tax class 3.

For this example, I assume that you also have to pay church tax, have no children and you have health, pension and unemployment insurance.

Example 1:

You are living in Berlin, the capital of Germany. Your tax calculation will look like this:

Gross salary: 3,500 Euros per month

Taxes you pay in total are 267.05 € and consist of:

  • Solidarity Surcharge: 0.00 €
  • Church Tax: 22.05 €
  • Salary Tax: 245,00 €

All Social Charges add up to 704.38 € and consist of:

  • Pension Insurance: 325.50 €
  • Unemployment Insurance: 42.00 €
  • Health Insurance: 274.75 €
  • Care Insurance: 62.13 €

Your net salary lands at: 2,528.58 €

Example 2:

You are living in Nuremberg (Nürnberg), the second-largest city in Bavaria. Your tax calculation will look like this:

Gross salary: 3,500 Euros per month

The taxes one pays in total 264.60 € and they consist of:

  • Solidarity Surcharge: 0.00 €
  • Church Tax: 19.60 €
  • Salary Tax: 245,00 €

All Social Charges add up to 704.38 € and consist of:

  • Pension Insurance: 325.50 €
  • Unemployment Insurance: 42.00 €
  • Health Insurance: 274.75 €
  • Care Insurance: 62.13 €

Your net salary lands at: 2,531.03 €

What you can learn from this example is that a few taxes / insurances would stay the same across Germany.

The second example shows a change in the church tax. The church tax in Bavaria and Baden-Württemberg is 1% lower than in all the other federal states.

Still, there can be slight differences between states that would lead to a higher or lower net salary based on your residence in Germany. I will let you more about that later.

Comfortable Salaries in Germany

One question that very often also comes up is:

What is a comfortable salary in Germany?

That mainly depends on your city of residence as well. Some cities have a high cost of living, like Munich and Hamburg. In the same time, Germany is not that expensive when renting an apartment or house in the countryside. Besides that, you can expect other living expenses like food to be very stable throughout the country.

In the following chapters, I explain the essentials to help you fill out the salary calculator for Germany.

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Salary Calculator Germany – Gross Net Calculator 2021 of the German Wage Tax System

See the whole translation and explanations below the calculator.

The above gross-net salary calculator 2021 for Germany uses the latest information and data from the German tax authorities (Finanzamt).

In this article, I try to summarize everything you need to know when calculating your net wage as a non-resident worker in Germany. In particular, I will focus on how much you have to pay in taxes and contributions when working in Germany.

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How to use the salary calculator Germany

To help you understand the salary calculator for Germany, I will give you a step-by-step tutorial on how to use the calculator from brutto-netto-rechner.info.

Step 1 – Enter your monthly or yearly gross wage in the salary calculator Germany

First of all, you need to provide either your monthly or yearly gross wage – Ihr Bruttolohn. This is the salary you are negotiating with your employer because they will always pay the gross salary.

yearly gross wage in the salary calculator Germany

Step 2 – Set the accounting period in the salary calculator Germany

The next step is to inform the income tax calculator about the accounting period- Abrechnungs­zeitraum. That information is essential to calculate your yearly and monthly tax expenses based on the salary you added in the line above.

Monat = Month

Jahr = Year

accounting period in the salary calculator Germany

Step 3 – Choose the accounting year in the salary calculator Germany

Setting the appropriate accounting period is essential, as tax years for employees always apply from January to December in one year. As you can imagine, there might be differences in taxes or insurance rates.

Abrechnungsjahr = Accounting year

accounting year in the salary calculator Germany

Step 4 – Tax-Free Allowance

You should enter your tax-free allowance – Jährl. Steuer­freibetrag – into the online gross net wage calculator, depending on your marital status. For singles, the allowance based on information from 2021 is as high as 9,744 €, while for married couples or people living in a recognized civil partnership, the allowance is as high as 19,488 €.

Jährl. Steuer­freibetrag = yearly tax-free-allowance

Tax-Free Allowance Germany

Step 5 – Choose your appropriate Tax Category in the salary calculator Germany

Consider either looking at your payslip (if you already work in Germany) or at my overview of tax classes in Germany below. Choose the correct tax class depending on your specific life situation.

Ihre Steuerklasse = your tax category

Choose Tax Category salary calculator Germany

Step 6 – Add in the rest of the information into the salary calculator Germany

To use the German wage tax calculator properly, please add all applicable information in the form. In case you have difficulties with one or the other, please refer to this article.

Here is the translation of all the other fields:

Zahlen Sie Kirchensteuer? = Do you pay church tax in Germany? / Ja = yes / Nein = no

Ihr Bundesland = your province in Germany

Kranken­versicherung = medical insurance / gesetzlich pflichtversichert = compulsorily insured / privat versichert = privately insured / freiwillig gesetzlich versichert = voluntary statutory insurance

Haben Sie Kinder? = Do you have children? / Ja = yes / Nein = no / Ihr Kinderfreibetrag = Your child tax allowance

Ihr Alter = your age

Renten­versicherung = Pension insurance

Arbeitslosen­versicherung = Unemployment insurance

Wöchentliche Arbeits­stunden = Weekly hours worked

Anzahl Gehälter pro Jahr = Number of salaries per year

PLZ o. Ort Ihres Arbeitgebers = Postcode or city of your employer

Ihr Beruf = your occupation

Branche des Unternehmens = in which industry do you work

Geschlecht = gender

Berechnen = calculate your salary in Germany

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Tax classes in Germany – In which tax category do you fit in for the tax calculator Germany?

Note: I’d prefer to leave both terms in this headline to ensure that you use “tax category” as another secondary keyword.

In Germany, the tax class you are in depends on your marital status.

Which tax class you qualify for depends on your personal situation.

This helps employers apply the correct rates and deductions. This means they don’t make mistakes when applying taxes that could result in owing a lot at the end of the year. Or paying too little on their employees’ paychecks.

In addition, there are other components, such as the solidarity surcharge and church tax, deducted from employees’ gross salaries each time they receive a paycheck.

Tax Class 0

Tax category 0 only applies for people that are not German residents, so it’s solely for people living abroad but working in Germany. This specific tax class is only valid for employees resident abroad whose wages are tax-exempt under double taxation treaties. They use a particular term for those cross-border commuters. They are called “Grenzgänger”. In case no double taxation treaty applies, they use tax category 6.

Tax_classes_Germany_Tax_0

Tax Class 1

Tax class 1 is intended for singles or taxpayers who are not or no longer married. Accordingly, this class is designed for persons who are single, unmarried (ledig), divorced (geschieden), or widowed (verwitwet).

Tax_classes_Germany_Tax_1

Tax Class 2

Single parents have tax class 2. One of the requirements is that the single parent must live with at least one child. In tax class 2, there is a tax advantage due to the single parent relief amount, the “Alleinerziehendenentlastungsbetrag”.

Tax_classes_Germany_Tax_2

Tax Class 3

Tax class 3 applies to married couples and is only possible for single earners or in combination with tax class 5. Generally, the higher earner should choose tax class 3. Tax class 3 is the tax class with the highest tax allowances and the lowest deductions. On the other hand, the deductions in tax class 5 are very high.

Tax_classes_Germany_Tax_3

Tax Class 4

If you get married, you enter tax class 4 automatically. Tax class 4 applies to spouses who earn approximately the same amount, as the income tax is distributed fairly. Married couples can change their tax class to the tax class combination 3/5 or 4/4 with a factor.

Tax Class 5

You are eligible for tax class 5 only if your marital status is married. Class 5 only makes sense if your spouse earns at least 60% of the household income or you are not working at all. If both of you earn almost the same salary, it’s better to stick with tax class 4.

Tax Class 6

Tax class 6 is intended for employees who have two or more jobs. The second job (if it exceeds the mini-job limit of 450€) is always taxed according to income tax class 6. In tax class 6, the deductions are exceptionally high.

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What is the difference between wage tax and income tax in Germany?

To help you understand the difference between wage and income tax in Germany, it’s essential to know about both terms’ definitions.

The difference between “wage” and “income,” while not always clear-cut or absolute, relates primarily to how they’re received.

Wage payments occur at regular intervals like monthly payrolls, whereas income includes any other form that may come your way.

These could be bonuses from work overtime, payouts on dividends paid out by stocks you own, or even gifts!

The federal tax ministry “Bundesfinanzministerium” explains that the income tax is paid for everything you earned throughout one tax year while the wage tax is paid monthly partly by you and your employer.

To give you an example:

Imagine you have a monthly gross salary of 4,000 € and occasionally rent out an Airbnb apartment for about 1,000 € per month. In that situation, you will have to pay a separate income tax on those additional 1,000 € either on a monthly, quarterly or yearly basis, depending on your negotiations with the local tax office.

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Can I change my tax class in Germany?

In general, as I will explain below, you can change your tax class, for example, from 4 to 3 or 5 if you are married to someone. This change is a voluntary decision to be made by you. All other tax changes happen “automatically” depending on your marital status, residency, or occupational status.

How to change your tax category in Germany?

Compared to tax calculation and tax returns, the process to change your tax class in Germany is relatively simple.

Changing your tax category only applies to married couples, and it is only recommended if the higher-earner earns around 60% or more of the total household income.

  1. First, I recommend you to get a hold of the form “Antrag auf Steuerklassenwechsel bei Ehegatten” (request for change of tax class for married people). You can either fill it online here on the website of the finance ministry and download it afterwards as a PDF file. If you prefer to fill in the form on your computer, you can consider downloading the empty PDF file here.
  2. As this document requires your and your partners signature, you will have to print and sign it.
  3. In a third step, please send it to your local tax authority (Finanzamt) either by post or drop it into their mailboxes.

Two critical notes from my side that you should keep in your mind for the salary calculator Germany:

The tax class change will happen in the month following your submitted request. So that’s when you can see a difference in your net salary!

This change is possible only once a year except if one of the reasons for a tax change applies to your situation:

  • Your hiring status of you or your partner changes and you are no longer an employee.
  • If you or your partner is hired again as an employee
  • You or your partner pass away
  • If you are getting divorced or separated from each other

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Will you have to pay the Church tax in Germany?

The amount of your church tax (worship tax) depends on the income you receive. In addition to your salary, it is also due for severance payments and capital gains. The laws are regulated by federal states in which they live in Bavaria and Baden-Württemberg taxes collected at 8%, all other federal states 9%.

A few congregations gather themselves with money taken from their members. If liable to pay taxes due to their religious community, this will be indicated on their electronic card from the government that tracks them using an employer pays directly into earnings office.

Denominations that charge church taxes in Germany

In Germany, there are state-recognized denominations that are allowed to charge church tax. They are:

  • Evangelical Regional Churches
  • Catholic Church
  • Old Catholic Church
  • Jewish Religious Communities
  • Israelite Religious Communities
  • Free Religious Communities
  • French Church in Berlin
  • Mennonite Community in Hamburg-Altona
  • Unitarian Religious Community of Free Protestants in Rhineland-Palatinate

Religious Groups that won’t have to pay church tax

Members of other religious communities, such as the Orthodox churches, Evangelical Free Church congregations, the Salvation Army and Jehovah’s Witnesses, do not pay church tax. As Muslim or Buddhist religious communities are not recognized as corporations, their members won’t have to pay any church tax.

The following religious communities don’t have to pay church tax:

  • Orthodox churches
  • Evangelical Free Church congregations
  • Salvation Army of Jehovah’s Witnesses

Muslim and Buddhist religious communities are in general not recognized as corporations, so their members won’t have to pay any church tax either.

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What represents the solidarity Surcharge in Germany?

The German solidarity surcharge only has to be paid by single employees that pay less than 972 Euros in income tax per year.

For couples, the “Solidaritätszuschlag” (or “Soli”) will be charged when the yearly tax load exceeds 1,944 Euros.

The solidarity surcharge exists since 1995 in Germany as a consequence of the reuniting of Germany.

Only since 2021, there has been a significant increase in the threshold amounts up to which no solidarity surcharge is applied to income tax: For spouses or persons in tax class III to 33,912 euros per year and 16,956 euros per year in all other cases.

Converted to the month, this means: no solidarity surcharge is charged up to an income tax of 1,413 euros (or 2,826 euros in tax class 3).

Is there any social security contribution in Germany in the salary calculator for Germany?

If you are employed in Germany, the German government requires that you make compulsory social security contributions. The contribution burden is split evenly between employer and employee – meaning your average total monthly payment is around 20-22%. Your charges will be deducted directly by your employer from each of your paychecks.

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How much is the social insurance contribution in Germany?

The following social security contributions (as of January 2021) are levied on employment income. Employer contributions are generally tax-free. The pension insurance is at 18.6%. Unemployment insurance is at 2.4%, health insurance is at 14.6%, and long-term care insurance is at 3.05%, respectively 3.3% for childless individuals beginning with the age of 23. All of these insurances are split in half between employer and employee.

Health Insurance

Almost everyone must contribute to statutory health insurance (currently, around 90% of the population is covered by a GKV scheme).

Your contribution is split equally between your employer and yourself up to what’s called “Gesetzliche Krankenversicherung”, which covers most medical costs, including hospital treatments, dental care, medicines, etc. To qualify automatically for sickness benefit (Krankengeld) and maternity benefits – Mutterschaftsgeld you have to contribute to the statutory health insurance.

Additional Health Insurance

If you are self-employed or earn more than 64.350 euros per year, you can choose to take out private health insurance or voluntarily contribute 14%. Additional health insurance options would go off your net income, like premium dental care, premium hospital insurance, and others.

Long-term care insurance

Germans are required to pay into a socialized long-term care insurance system. This ensures that they receive quality healthcare benefits in their old age, should accidents or illness occur. You are automatically enrolled as long as you pay for the statutory health coverage.

Also, you may need to apply individually for this if you have a private health plan. In 2021, the contribution is set to 3.05% of your gross income, plus an additional 0.25% if you don’t have any kids.

Long-term care insurance amounts to a maximum of €4,837.50 per month in both East and West Germany and is paid half by you and half by your employer.

Pension Contributions

Pension insurance is mandatory for everybody who earns a wage or salary in Germany. This specific insurance covers any/all illnesses and injuries that might occur during work (including home-office).

Some employers will pay for this insurance themselves. Others expect their employees to contribute between 2% and 5%. If you have an employer who pays for half of the insurance, you only have to contribute 1% yourself.

Unemployment Insurance

If your employer – for whatever reason – no longer pays you your full salary, be prepared to apply yourself. As a rule, you will receive remuneration replacement benefits or wage replacement benefits, but it is tax-free and subject only to the progression proviso (tax code). While these wages are not taxed at 100%, they contribute in some way towards calculating how much other income might be taxed on top of that with higher percentages. For that reason, it’s required that you declare all wage replacement benefits in your tax return.

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How high is the tax-free allowance in Germany?

If you’re single and not in a civil partnership, by 2021, the basic tax allowance will be 9,744 Euros. If you are married or in a civil partnership, this threshold rises to 19,488 Euros.

I hope this information has been helpful for you and that it helped answer some of your questions about the German tax system. To help you calculate your net salary, I put together all information provided above as the German tax system can be pretty challenging to understand if you did not grow up in this country. You may find my Germany Salary Calculator useful- just plug in your income and see what percentage goes to taxes on average. Happy calculating!

Also interesting in this context:

Average salary in Germany – latest data

CV in German with Europass: How to fill in step by step

Tax return Germany: 49 deductible expenses

If you’re wondering what to do next … What about learning German fast? Here are my best 10 strategies for learning German fast.