Tax Brackets (Steuerklassen) & Social Security Contributions

In the German tax system there are a total of six different income tax classes, which are based on the taxpayer’s family situation. The tax class table shows which tax classes are available and for whom they are intended.

Tax BracketsMarital Statusmonthly Tax-Free Salary (Gross Salary)
Tax Bracket 1single, widowed, separated / divorcedup to 1029 EURO
Tax Bracket 2single parent, living separatelyup to 1225 EURO
Tax Bracket 3Married people (higher income), recipients of parental allowance
combination with Tax Bracket 5
up to 1952 EURO
Tax Bracket 4Married (both incomes equal)up to 1029 EURO
Tax Bracket 5Married people (lower income),
combination with income Tax Bracket 3
up to 107 EURO
Tax Bracket 6Second and part-time job (regardless of marital status)up to 0 EURO

In addition, the following principle applies in Germany: the higher the salary, the more income tax has to be paid. According to this principle, the wage tax rate currently varies between 14% and 45% of annual income.

The higher the wage tax or income tax, the higher the solidarity surcharge and church tax.

  • Solidarity surcharge: Since 1991 employees have had to pay 5.5% of their wage tax as a solidarity surcharge to the tax office. Employees who pay less than EUR 81 wage tax per month are exempt from the solidarity surcharge.
  • Church tax: Church members pay 9% of their income tax in church tax. Exception: In Bavaria and Baden-Württemberg the church tax percentage is 8% of the wage tax.

Health insurance (Krankenversicherung)*

For statutory health insurance, however, a uniform contribution of 14.6% of the gross salary has to be paid. Employees and employers share this contribution equally, so that each has to pay 7.3% of the salary. In addition, every health insurance company may levy an income-related additional contribution that is only payable by the insured person. If this additional contribution is, for example, 1%, the employee must pay a total of 8.3% of his gross salary as an insurance contribution.

Pension insurance (Rentenversicherung)*

The contribution rate for the statutory pension insurance is 18.6% of the gross salary, of which 50% (i.e. 9.3%) is paid by the employee and the employer.

Care insurance (Pflegeversicherung)*

Employees and employers also share the contribution rate for statutory long-term care insurance, which is 2.55% nationwide, in equal proportions (1.275% each). However, childless employees over 23 years of age have to make a 0.25% higher contribution.

Unemployment insurance (Arbeitslosenversicherung)*

Except for mini-jobbers with a maximum income of 450 euros per month, soldiers or civil servants, all employees have to pay contributions to the unemployment insurance. The contribution rate here is 3%, half of which (1.5% each) is to be paid by the employee and the employer.

*not to be paid by short-term employees (semester employment)

 

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