Gross Net Salary Calculator
Gross Net Salary Calculator
Income and Taxation Summary
|Salary Before Taxes||€3,000.00||€36,000.00|
|Deductions in Total||€982.25||€11,787.00|
|Salary After Taxes||€2,017.75||€24,213.00|
Tax Class Comparison
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Tax Classes (Lohnsteuerklasse)
- Class 1: Single, widowed, civil partnership, divorced, spouse living abroad or legally separated.
- Class 2: Single parents.
- Class 3: Married, one spouse has a significantly higher income than the other spouse and lives in Germany.
- Class 4: Married, both spouses have similar wages, reside in Germany and are not separated.
- Class 5: Married, but one of them, at the request of both spouses, is classified as tax Class 3.
- Class 6: Workers who receive multiple wages from multiple employers.
Employment income is taxed at source, according to the tax class of the individual. Tax Classes vary in nature depending on the applicable tax exemption threshold. Married couples can choose a combination of Class 3/5 or Class 4/4. In the former case, the higher-earning spouse gets twice the basic tax-free rate. In the latter case, both spouses are taxed according to the standard exemption rate.
A combination of tax Classes 3 and 5 for married couples is only possible if both spouses are resident in 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.
The choice of tax class is only important for withholding tax, and therefore for immediately disposable income. The choice of tax class has no effect on tax refunds.
Changing Tax Class
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.
Children Allowance (Kinderfreibetrag)
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.
Allowances for children affect the amount of the solidarity surcharge and church tax. However, these allowances have no effect on the amount of wage tax.
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 tax.
Pension Insurance (Rentenversicherung)
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. The Pension insurance is equally shared between employee and employer.
Unemployment Insurance (Arbeitslosenversicherung)
Unemployment insurance is part of the social security system in Germany. The contribution rate for unemployment insurance is 2.4% of the gross salary, equally shared between employee and employer. This is effective from January 1, 2020 until December 31, 2022.
Health Insurance (Krankenversicherung)
Everyone is subject to compulsory health insurance contributions. Self-employed or who earn more than €64,350 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 employee and employer. 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 1.2% of the gross salary.
You have three alternatives for health insurance, each of which has an impact on your final income:
- Statutory or Public - Almost 90% of the population (73,3 million people) pays into the public health insurance system. Long-term care insurance is also covered by public health insurance (Pflegeversicherung). The amount paid for health insurance is equally divided between employer and employee.
- Private (no subsidy) - Private health insurance where the employee bears the whole cost.
- Private (with subsidy) - Private health insurance where the insurance cost is shared between employer and employee.
Care Insurance (Pflegeversicherung)
From January 1, 2022, the contribution rate is 3.05% of gross income for parents and 3.40% for childless persons. The insurance costs are shared between the employer and the employee.
Solidarity Surcharge (Solidaritätszuschlag)
The Solidarity Surcharge was introduced in 1991. From 2021 the German government changed the law, hence, only the higher earners are required to pay Solidarity Surcharge. As of 2022, 5.5% of the income tax is deducted as Solidarity Surcharge from the gross salary if the income tax is above €16,956 for singles and €33,912 for married couples who fill their tax assessment jointly. Furthermore, the Solidarity Surcharge cannot be more than 11.9% of the difference between the income tax and the exemption threshold.
Church Tax (Kirchensteuer)
Taxpayers, whether Roman Catholic, Protestant, or members of other tax-collecting 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 religious community to which they belong.
You can only stop paying the church tax if you leave the church.
Income Tax (as of 2022)
Germany has a progressive income tax system. Progressive taxation means that individuals with low income pay low or no taxes. Those with higher income pay more taxes. With the increase in the gross salary, the income tax rate also increases. The tax levels are divided into five tariff zones:
- Tariff zone 1: Whose yearly income is below €9,985 are income tax exempt.
- Tariff zone 2: It applies to all taxable income between €9,985 and €14,926. In this zone, the tax rate increases gradually from the entry-level tax rate of 14% to 23.97%.
- Tariff zone 3: It applies to all taxable income between €14,927 and €58,596. The tax rates in this tariff zone increases gradually from 23.97% to 42%.
- Tariff zone 4: It applies to all incomes between €58,597 and €277,825. In this tariff zone, the tax rate no longer increases gradually, but remains constant at 42%.
- Tariff zone 5: It applies to all incomes from €277,826. In this tariff zone the tax rate is constant at 45%.