Tax Class 4/4 vs 3/5 in Germany: When Which Combination Makes Sense

Last updated: 2025-12-11

Tax class 4/4 vs 3/5 – which one actually pays off?

If you live and work in Germany as a married couple, you’ve probably heard this sentence before:

“Switch to tax class 3/5, you’ll get much more net every month.”

Sometimes that’s true. Sometimes it isn’t. And almost always, the second half of the sentence is missing:

“...but the tax return at the end of the year will even things out.”

This guide walks you through, in plain English:

• What tax classes 3, 4 and 5 actually do
• How the basic tax-free allowance (Grundfreibetrag) protects your income
• When 4/4 is usually the better, calmer choice
• When 3/5 can be useful to boost monthly net income
• Why the tax return is the final referee in both cases

All examples are calculated with the LohnTastik gross–net calculator for Baden-Württemberg, 2026.

Quick refresher: the key tax classes for couples

Germany has six tax classes (Steuerklassen). For couples who live together and both work, these three are the ones that matter:

• Class 4 – both partners work and earn roughly similar salaries
• Class 3 – used by the higher earner in a 3/5 combination
• Class 5 – used by the lower earner in a 3/5 combination

Your final tax for the year is always calculated together in the tax return (Ehegattensplitting). Tax classes only decide how much tax your employer withholds from each monthly payslip.

Think of it this way:

• Tax class = distribution key for how the tax office takes its money during the year.
• The tax return later checks whether, as a couple, you:
• paid too much → you get a refund, or
• paid too little → you receive a back payment notice.

The tax-free amount: the part of your income nobody taxes

Before we compare 4/4 and 3/5, it’s worth looking at the basic tax-free allowance (Grundfreibetrag) – the piece of income that is simply off‑limits for the tax office.

For 2026, the basic allowance looks like this:

All income up to this amount stays completely tax‑free and is meant to protect your basic cost of living. This tax advantage applies to everyone, no matter which tax class you are in.

Highly simplified, the annual logic is:

1. Take your combined income as a couple.
2. Subtract the joint Grundfreibetrag.
3. Only tax what’s left, using the progressive tax rates.

This is why the tax class combination does not change how much tax‑free income you have as a couple. It only changes how this tax-free portion is mirrored on your monthly payslips:

• In 4/4, each partner’s payroll uses roughly one basic allowance → both payslips look moderate and similar.
• In 3/5, most of the effect is pushed into class 3 → their net jumps up, while class 5 looks brutally taxed.

So in both combinations, the Grundfreibetrag protects the same share of your joint income. The big difference is who feels the relief every month – and how much the tax return has to correct later.

Germany’s progressive income tax and brackets (2026)

Germany has a progressive income tax system. Progressive taxation means that people with lower incomes pay low or no income tax, while people with higher incomes pay a higher share. As your gross salary increases, your marginal tax rate also increases.

For 2026, the income tax is divided into five tariff zones:

• Tariff zone 1: Taxable annual income up to €12,348.00 is income-tax exempt (this is exactly the basic tax-free allowance from above).
• Tariff zone 2: Taxable income between €12,349.00 and €17,799.00. Here, the tax rate rises gradually from the entry-level 14% up to 23.97%.
• Tariff zone 3: Taxable income between €17,800.00 and €69,878.00. In this range, the tax rate continues to increase gradually from 23.97% to 42%.
• Tariff zone 4: Taxable income between €69,879.00 and €277,825.00. The tax rate here is a constant 42%.
• Tariff zone 5: Taxable income from €277,826.00 upwards. In this zone, the tax rate is a constant 45%.

Your tax class combination (4/4 or 3/5) does not change these brackets or the progressive structure – it only changes how much tax is deducted from each monthly payslip as an advance payment against this progressive annual tax.

Example 1: Similar incomes – why 4/4 is the “peaceful” choice

Let’s start with a couple where both partners earn €3,000 gross per month. Using the LohnTastik calculator (Baden-Württemberg, 2026):

Takeaway: With similar incomes, 4/4 gives this couple around €75 more net per month than 3/5 1 and both payslips look balanced.

With comparable salaries, 4/4 (or 4/4 with the “factor” method) usually wins because:

• Your take‑home pay is shared fairly between you.
• The monthly withholding is close to the final annual tax, so the tax return typically brings only small surprises (refund or back payment).

Example 2: Unequal incomes – when 3/5 boosts your monthly net

Now take a more typical “unequal” couple:

• Partner A: €4,000 gross per month
• Partner B: €2,000 gross per month

Again using the LohnTastik calculator (Baden-Württemberg, 2026):

Here, the 3/5 combination gives the couple about €113 more net per month than 4/4.

• The higher earner (class 3) benefits from a larger share of the tax-free allowance and lower withholding.
• The lower earner (class 5) sees a noticeably lower net, because almost no allowance is applied and the marginal tax rate is high.

So is 3/5 just free money?

Not really. In the annual tax return, your joint tax is calculated on the combined income, independent of 3/5 vs 4/4. The tax office compares this with what was already withheld and either refunds overpaid tax or asks for a back payment.

In practice, that means:

• 3/5 often leads to higher net during the year, but smaller refunds or higher back payments.
• 4/4 often means slightly less net during the year, but more refund potential.

Visually: how 3/5 “bends” the allowance towards one partner

The tax-free allowance (Grundfreibetrag) is meant to keep a minimum level of income untaxed. For a jointly assessed couple, the law effectively uses twice the single allowance when calculating the final annual tax.

The tax classes are just different ways of approximating this in monthly withholding:

• In 4/4, each payslip behaves as if there were one allowance per person.
• In 3/5, the class 3 payslip acts almost like two combined allowances, while class 5 is treated as if there were no free threshold left.

Visually, you can imagine your monthly tax as two bars:

• 4/4 → two medium‑high bars: both partners taxed moderately.
• 3/5 → one short bar (class 3) and one tall bar (class 5).

The total area of both bars together is what matters for the tax return. The tax-free amount is still there; 3/5 just concentrates the relief into the higher‑earner’s payslip.

When is 4/4 usually the smarter option?

You’ll often be better off with 4/4 if:

• Your gross incomes are similar (rough rule of thumb: within ~10–15%).
• You want fair, predictable take‑home pay for both partners.
• You prefer that the monthly withholding is close to the final annual tax, so the tax return does not result in a nasty back payment.

4/4 (or 4/4 with the factor method) is also frequently recommended when:

• One partner expects wage replacement benefits such as parental allowance (Elterngeld), unemployment benefit (Arbeitslosengeld) or sick pay (Krankengeld). These are often calculated from your net salary, so an extreme 3/5 split can hurt future benefits for the class 5 partner.

When can 3/5 be a good idea?

The 3/5 combination can make sense if:

• One partner earns significantly more than the other (for example, double or more).
• You need more net income in the higher earner’s payslip to cover high rents, loans or childcare.
• You are comfortable with the idea that the tax return may bring little refund or even a back payment.

Typical pattern:

• Partner A: full‑time, high salary.
• Partner B: part‑time, mini‑job or low salary.

In such cases, 3/5 can improve cash flow during the year, but it does not fundamentally change your total annual tax burden as a couple – the tax office recalculates everything on the joint income.

The tax return: the big annual correction

Regardless of whether you pick 4/4 or 3/5, two things always remain true:

• The Lohnsteuer on your payslip is only an advance payment.
• The final tax is determined in the income tax return.

If, over the year, too much was withheld (very common with 3/5), you get the difference back as a tax refund. If too little was withheld (possible with bonuses, side income, or certain benefits), you may face a back payment.

That’s why you should only switch to 3/5 deliberately:

• It can improve monthly liquidity,
• but the tax return will settle the bill in the end.

Quick check: your own numbers

You can verify these patterns with your own salaries using the LohnTastik gross–net calculator. Enter each partner’s gross monthly pay and compare the totals for 4/4 versus 3/5. Pick the option that fits your cash‑flow needs and fairness preferences; the tax return will balance the final bill.

Summary: 4/4 vs 3/5 in one glance

• 4/4 is usually best when your incomes are similar and you want balanced net salaries and small corrections in the tax return.
• 3/5 can boost the higher earner’s monthly net when incomes differ strongly, but often leads to smaller refunds or higher back payments.
• The tax-free allowance (Grundfreibetrag) exists in both cases – 3/5 simply bends more of its effect toward the class 3 payslip.
• No matter what you choose, the annual tax return is where the real decision is made and where you get back overpaid tax.

This article can't replace individual tax advice. If your situation is more complex (self-employment, several jobs, benefits), talk to a tax advisor (Steuerberater) or a Lohnsteuerhilfeverein to get a tailor‑made recommendation. If you file on your own, a guided tool (e.g. Smartsteuer) can help reduce common input mistakes.