Question 1

What is the difference between Brutto and Netto salary in Germany?

Accepted Answer

Brutto is your gross contractual salary before any mandatory deductions. Netto (take-home pay) is the exact amount transferred to your German bank account after deducting income tax (Lohnsteuer §32a EStG), solidarity surcharge (Solidaritätszuschlag), church tax (Kirchensteuer, if applicable), and social security contributions (pension, health, unemployment, and long-term care insurance).

Question 2

Which tax class (Steuerklasse) should I choose if I'm married in Germany?

Accepted Answer

Married couples can choose between combinations IV/IV, III/V, or IV/IV with Factor (Faktorverfahren). If both spouses earn similar incomes, Steuerklasse IV/IV is optimal. If one spouse earns significantly more (60%+ of household income), Steuerklasse III (lower tax for higher earner) and Steuerklasse V (higher tax for lower earner) maximizes monthly take-home pay, though total annual tax owed is equalized upon filing an annual tax return (Einkommensteuererklärung).

Question 3

Do I have to pay church tax (Kirchensteuer) in Germany?

Accepted Answer

You only pay church tax if you declare an official religious affiliation (Catholic or Evangelical/Protestant) during registration (Anmeldung). Church tax is 8% of your income tax in Bavaria and Baden-Württemberg, and 9% in all other federal states. You can legally opt out at any time by filing a formal church resignation (Kirchenaustritt) at your local Standesamt or Amtsgericht.

Question 4

What is the basic tax-free allowance (Grundfreibetrag) for 2026?

Accepted Answer

For the 2026 tax year, the German basic tax-free allowance (Grundfreibetrag) is €11,784 per single individual (€23,568 for married couples filing jointly). Income up to this threshold is 100% tax-free.

Question 5

How is Solidaritätszuschlag (Soli) calculated in 2026 and who pays it?

Accepted Answer

The Solidarity Surcharge is 5.5% of your income tax liability. However, over 90% of employees are exempt. In 2026, single taxpayers (Tax Class I) only pay Soli if their annual income tax (Lohnsteuer) exceeds €18,130 (corresponding to a gross annual salary above ~€75,500).

Question 6

What is the difference between statutory (GKV) and private (PKV) health insurance?

Accepted Answer

Statutory health insurance (GKV) charges a base rate of 14.6% plus an average supplementary fee (Zusatzbeitrag ~2.5%), split 50/50 between employee and employer up to the contribution cap (€62,100/yr). Employees earning above the compulsory insurance threshold (€69,300/yr in 2026) can switch to Private Health Insurance (PKV), where premiums depend on age and health status rather than income.

Question 7

How are 13th-month salaries and Christmas bonuses (Weihnachtsgeld) taxed?

Accepted Answer

Bonuses and 13th-month payments are treated as non-recurring income (Einmalbezug). They are taxed in the month received using a special annual formula that calculates tax on your projected annual gross salary including the bonus, resulting in higher temporary tax withholding for that pay period.

Question 8

What is the EU Blue Card minimum salary requirement in Germany for 2026?

Accepted Answer

For 2026, the EU Blue Card minimum gross salary threshold in Germany is €45,300 per year for standard occupations, and €41,041 for shortage occupations (STEM fields, IT, healthcare, and engineering).

Question 9

How can I lower my German income tax liability?

Accepted Answer

You can reduce taxable income by claiming work-related expenses (Werbungskosten above the €1,230 lump sum), commuter allowances (Pendlerpauschale 30c–38c per km), home office allowance (€6/day up to €1,260/yr), pension contributions (Vorsorgeaufwendungen), and relocation costs.

Question 10

Can I use this calculator if I am a freelancer (Freiberufler)?

Accepted Answer

This tool is designed for statutory employees (Angestellte). Freelancers and self-employed individuals do not receive employer-matched social security contributions and must pay full pension (18.6%) and health insurance out of pocket, as well as trade tax (Gewerbesteuer). Use our dedicated Freelancer Tax Calculator for self-employed estimates.

Question 11

What is the long-term care insurance (Pflegeversicherung) childless surcharge?

Accepted Answer

Employees aged 23 and older without children pay a 0.6% childless surcharge on top of the 1.7% standard employee share, bringing their total Pflegeversicherung contribution to 2.3% of gross income (up to the cap of €62,100).

Question 12

How does the German tax year work for expats arriving mid-year?

Accepted Answer

Germany taxes worldwide income if you reside in the country for more than 183 days in a calendar year (tax residency). Income earned abroad prior to moving is subject to the progressivity clause (Progressionsvorbehalt), which determines your tax rate without taxing foreign earnings directly.