Income tax in Germany

What income is taxable in Germany?

• Are you living in Germany for more than 6 months? A continuous stay of more than 6 months constitutes habitual residence in Germany. A habitual residence or domicile in Germany means that you have unlimited tax liability in unlimited tax liability in Germany and must pay tax on your worldwide income there.
• Have you lived in Germany for a maximum of 6 months? If you are neither resident nor ordinarily resident in Germany, you only pay tax in Germany on the income you earn there. In this case, you are subject to limited tax liability .
• Do you receive income from other European Union (EU) countries? Make sure that you do not pay tax twice on the same income.

How much do you have to pay?

What remains of your gross income in Germany after the tax deduction?

The taxable income is calculated from the total income from the different types of income, taking into account various exemptions and deductions. The income tax payable on this is determined according to the following key figures:

• up to EUR 10,347 taxable income, marginal tax rate in 2022 of 0 percent (2023: up to EUR 10,908
• from EUR 10,348 to EUR 14,926 taxable income, marginal tax rate in 2022 increasing from 14 percent to 24 percent (2023: EUR 10,909 to EUR 15,999)
• from EUR 14,927 to EUR 58,596 taxable income, marginal tax rate in 2022 increases from 24% to 42% (2023: EUR 16,000 to EUR 62,809)
• EUR 58,597 to EUR 277,825 taxable income, from a marginal tax rate of 42% in 2022 (2023: EUR 62,810 to EUR 277,825)
• from EUR 277,826 taxable income, marginal tax rate in 2022 of 45 percent

In addition, above an exemption threshold of EUR 16,956 (2022) or EUR 17,543 (2023), a solidarity surcharge in the amount of 5.5 percent of your income tax.

If you are also a member of a church tax religious community, you pay church tax. Church tax is also calculated on the basis of income tax and amounts to 8 percent in Bavaria and Baden-Württemberg and 9 percent in other federal states.

Certain deductions are taken into account when calculating income tax.

When and how do you pay as an employee?

Your employer withholds the wage tax to be paid from your wages withheld and pays it to the tax office. With the interactive wage and income tax calculator of the Federal Ministry of Finance, you can calculate your estimated income tax liability.

In addition to the taxes due, the employer also deducts the employee contributions due to the statutory social insurance schemes directly from the salary. These include contributions for pension, long-term care, unemployment and health insurance.

Is your salary your only source of income? In this case, you generally do not need to submit a tax return. However, there are exceptions, for example if you have received wages from several jobs at the same time.

Would you like to submit a tax return in order to take advantage of certain tax allowances? Then send it to the tax office responsible for you before the deadline in the following year:

• 2023 tax return: by 30.8.2024
• Tax return 2024: by 31.07. 2025
• Tax returns from 2025: by the end of July of the following year

Your tax office will inform you about your rights and obligations. You can obtain comprehensive advice from tax advisors and lawyers, who can also provide you with legal assistance before authorities and courts.

Appeals or legal action

You can appeal against your tax assessment within one month from the date of notification to the tax office. You can appeal against the decision on the objection to the tax court.

When and how do you pay as a self-employed person?

You may have to advance tax payments based on your income from the previous year to offset your expected final tax liability, if this has been determined by the tax office.

You have a new company founded?

If you open an agricultural, forestry or commercial business or a permanent establishment, you must notify the municipality in which the business or permanent establishment is opened. The municipality will forward the information to the relevant tax office. If you take up a freelance activity, you must notify the relevant tax office immediately .

In addition to the above-mentioned notification of the commencement of work, the tax office requires further information on the legal and factual circumstances relevant to taxation. This information is provided in the questionnaire for tax registration which you must submit to your tax office within one month of starting your business without being asked.

Based on the information you provide in the questionnaire, the tax office will determine the amount of the advance payments for the taxes to be paid.

As long as your company exists, you must submit your tax returns to the tax office responsible for you before the applicable deadline:

• 2023 tax return: by 30.8.2024
• Tax return 2024: by 31.07. 2025
• Tax returns from 2025: by the end of July of the following year

Your tax office will inform you about your rights and obligations. You can obtain comprehensive advice from tax advisors or lawyers, who can also provide you with legal assistance before authorities and courts.

Appeals and complaints

You can appeal against your tax assessment within one month from the date of notification to the tax office and appeal against the decision on the appeal to the tax court.

• Interactive wage and income tax calculator