|Salary Before Taxes||€3,000.00||€36,000.00|
|Deductions in Total||€959.00||€11,508.00|
|Salary After Taxes||€2,041.00||€24,492.00|
Married couples can choose a combination of tax classes 3/5 or 4/4. In the first case, the higher-earning spouse in tax bracket 3 receives a doubled basic tax exemption, while the lower-earning spouse in tax bracket 5 receives no basic tax exemption. In the combination of tax groups 4/4, both spouses receive the basic tax exemption.
A combination of tax Classes 3 and 5 is only possible for married couples who are both residents of Germany. If your spouse is still waiting for their visa in your home country, you will be classified in tax Class 1 and you can apply for a change of tax class as soon as your spouse is also registered in Germany.
Single parents in Tax Class 2 are entitled to an additional tax allowance (Entlastungsbetrag für Alleinerziehende).
During the year, married couples and single parents can apply to change their tax class.
The choice of tax class is only relevant for withholding tax and hence for immediately available income.
Married couples who select tax class 3 for the higher-earning partner may benefit from a higher monthly net salary. However, because the partners are required to file a joint tax return at the end of the year, this tax class combination does not result in tax savings.
During the annual income tax declaration, both spouses' salaries are added together and the income tax is calculated on this basis. The difference between income tax paid for the year with the tax class combination 3/5 and the income tax payable for the year must be equalized. This could result in a tax refund or an additional tax payment.
Since January 1, 2020, spouses and civil partners can change their income tax class many times within a year. The change of tax class can be done through the ELSTER webpage, or at the tax office in the district where the spouses reside at the time the application is filed. It must be signed by both spouses and then sent to the tax office.
Parents can receive a child allowance for their children when they pay their taxes. The child allowance is intended to ensure that all children have the minimum subsistence level. If the parents do not exceed a certain amount, their income remains tax-free.
Child allowance affects the monthly deduction of the solidarity surcharge and church tax. However, the child allowance does not affect the monthly deduction of the income tax, this is taken into account in the annual tax assessment.
The main difference between "Kindergeld" and "Kinderfreibetrag" is that "Kindergeld" is transferred to your account monthly. "Kinderfreibetrag" on the other hand, is not paid monthly but is taken into account by the tax office during the annual tax assessment.
This applies in general: the parents are entitled either to the child benefit or to the child allowance. It is not possible to receive the child benefit and then try to deduct the full child allowance from the income tax.
Everyone who works in Germany is required to participate in a pension plan. Over time, your contributions accumulate to provide you with a basic pension for your retirement. If you are self-employed you can choose whether to join the statutory pension insurance or set up a private pension plan. The pension insurance contribution rate has been constant at 18.6% since January 1, 2018. Pension insurance is equally shared between employees and employers.
Unemployment insurance is part of the social security system in Germany. The contribution rate for unemployment insurance is 2.6% of the gross salary, equally shared between the employees and employers. This is effective from January 1, 2023, until December 31, 2023.
Everyone is subject to compulsory health insurance contributions. Self-employed or who earn more than €66,600 a year, have the choice between private health insurance or a voluntary contribution to statutory health insurance.
The contribution to statutory health insurance is 14.6% of the gross salary and is equally divided between the employees and employers. 7.3% is deducted directly from the gross salary and the remaining 7.3% is contributed by the employer. Additionally, there is a supplementary contribution based on the income of the individual health insurance fund. This is an average of 1.6% of the gross salary.You have three alternatives for health insurance, each of which has an impact on your final income:
From 1 January 2022, the contribution rate is 3.05% of gross income for parents and 3.75% for childless persons. Insurance costs are shared between employers and employees.
The solidarity surcharge was introduced in 1991. In 2021, the German government changed the legislation, from now on only highly paid employees are obliged to pay the solidarity surcharge. Starting in 2022, 5.5% of income tax is deducted as a solidarity surcharge from the gross salary if the income tax exceeds €17,543 for single individuals and €35,086 for married couples who fill out the tax return jointly. In addition, the solidarity contribution cannot exceed 11.9% of the difference between the income tax and the exemption threshold.
Taxpayers, whether Roman Catholic, Protestant or members of other tax-levying religious communities, pay an amount equal to 8% in Bavaria and Baden-Württemberg or 9% in other federal states of their income tax as tax to the religious community to which they belong.
You can only stop paying the church tax if you leave the church.
In Germany, midi-jobs are a type of employment arrangement that allows workers to earn up to a certain amount of income per month while paying reduced social security contributions. This type of employment arrangement is intended to help low-income earners who may find it difficult to afford the full contributions. To qualify for a midi-job, employees must earn between €520.01 and €2,000 per month. At these earnings levels, the employee contribution to social security remains at zero until €520.01, and then gradually increases until the upper limit is reached.
Despite the reduced contributions, midi-jobbers are still entitled to the same benefits as regular employees, including health insurance, long-term care insurance, and unemployment insurance. These benefits are not affected by the reduced contributions, and midi-jobbers are entitled to the same level of coverage as regular employees.
Pension insurance for midi-jobbers is also not affected by the reduced contributions. Just like full-time employees, midi-jobbers are entitled to the same pension benefits based on their actual earnings from their midi-job. Overall, midi-jobs provide a way for low-income earners to be entitled to the same social benefits and protections as full-time employees.
The above salary calculator applies the 'sliding rate' for social security contributions to gross salaries between 520.01 € and 2,000 € per month, which is also known as the 'sliding zone'.