Who Pays Income Tax?

If you live in Germany, you are a tax resident and must declare your worldwide income, regardless of nationality. A registered address alone makes you a resident for tax purposes. More on our blog.

Tax Classes Explained

Germany assigns tax classes based on family status. Singles are Class I, single parents Class II, married couples choose III/V or IV/IV, second jobs use Class VI. Classes affect monthly payslip withholding, not the final annual tax liability. More on our blog.

Solidarity Surcharge (Soli)

The Soli is an additional 5.5% levied on income tax. It applies only above a certain income tax threshold (Freigrenze) and is calculated automatically in this simulation. Many lower and middle earners pay no Soli at all. More on our blog.

Church Tax

Members of a church recognised by the German tax administration pay an additional 8 or 9% of their income tax as church tax. Membership status is registered with the authorities and determines whether this tax applies. More on our blog.

Investment Income (Abgeltungsteuer)

Dividends, interest and capital gains are taxed at a flat 25% plus Soli, separate from the progressive income tax scale. A savings allowance (Sparer-Pauschbetrag) applies before any tax is due. More on our blog.

Foreign Income and Progression

Income exempt from German tax under a double taxation treaty may still raise your effective German tax rate via the Progressionsvorbehalt (progression clause). See the notice below the simulation. More on our blog.

Your Situation
Tax year
Children eligible for Kindergeld
0
Your Worldwide Income
Employment income
€
Taxed at individual progressive tax rate and subject to social security contributions
Other taxable income
€
Taxed at individual progressive tax rate
Investment income (Abgeltungsteuer)
€
Flat tax 25% + Soli; €1,000 savings allowance
Foreign income subject to progression clause
€
Not taxed in Germany, but raises your German tax rate
Options
Church tax (Kirchensteuer)
Only if you are a member of a recognised church
Include social security estimate
Health, pension, unemployment and long-term care
Additional deductions
Individual deductions in addition to or exceeding the employment deduction (Werbungskostenpauschbetrag)
€
🧮
Your estimated taxes appear here Fill in the fields on the left and click Run Tax Simulation
Social Security and Healthcare Contributions (Employee Share)
In Germany, employees contribute to four mandatory social insurance schemes, withheld alongside income tax. Rates shown reflect the employee share only. Your employer pays an approximately equal amount on top. Contributions are capped at the Beitragsbemessungsgrenze (contribution ceiling).
Health insurance
–
14.6% GKV contribution, 7.3% employee share plus 2.5% surcharge
Pension insurance
–
18.6% total, 9.3% employee share
Unemployment insurance
–
2.6% total, 1.3% employee share
Long-term care
–
Rate depends on number of children
Estimated Total Mandatory Contributions –
Important: The statutory health insurance (GKV) contribution shown is an indicator only. Each GKV provider charges a different additional contribution rate (Zusatzbeitrag), and actual premiums may include co-payments and additional charges not reflected here. Private health insurance (PKV) may be available for employees above the income threshold (Versicherungspflichtgrenze) and can result in significantly different premiums, especially for younger or healthier individuals. Freelancers and self-employed persons are generally not required to contribute to statutory pension, unemployment or long-term care insurance. However, they must maintain health insurance coverage and, if in the statutory system (GKV), pay the full contribution themselves without an employer share. The amounts presented are estimates for employed individuals and do not apply to freelance or self-employed situations. Always verify actual contributions directly with your insurer or social security authority.

Foreign Income and the Income Tax Progression Clause (Progressionsvorbehalt)

If you entered foreign income above, this simulation has applied the Progressionsvorbehalt: the foreign amount is used to determine a higher effective tax rate, which is then applied to your German income only. The foreign income itself is not taxed in Germany where a treaty exemption applies.

The actual application depends on the specific double taxation treaty, your country of origin, the type of income and your tax residency status in both countries. Always seek professional advice for cross-border income situations.

Important: This Is a Simulation, Not a Tax Assessment

Results are based on the standard German income tax formula (§ 32a EStG), applicable basic allowances and statutory rates for the selected year. Many factors are not fully reflected, including partial-year residency, complex treaty situations, freelance business expenses, special allowances and Finanzamt decisions.

Do not rely on this simulation for financial or tax planning decisions. For an accurate, personalised assessment — especially with foreign income, US tax obligations or other cross-border situations — consult a qualified tax advisor who specialises in expat taxation.

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