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Tax classes (Steuerklasse) in Germany

It’s time to check your tax class in Germany: yes, you can change it and, of course, you can apply for a refund

#Steuerklasse #taxclass #Germany #Lohnsteuerkarte #Finanzamt #Steuererklärung

What’s a tax class in Germany?

Referred to as “steuerklassen”, tax classes set the income tax rate based on your marital status, how much money your spouse earns and how many dependent children you have. The amount of unemployment benefits, social security and leave depend all on the tax class you have been assigned to.

Every employee must personally declare and register his/her current circumstances with the German authorities.

Once the tax authorities associate your profile to a tax class, it will be used to calculate and withhold tax from the monthly payroll.
In case there will be any change in your life, the tax class can be modified in your payroll. All incorrect withholding accounted for will be added in your tax return at the end of the fiscal year.

The 6 steuerklassen

Tax Class

Description

I

The first class is for single workers, or for those whose spouses live abroad

II

Singles and separated, with a dependent child

III

“Married”, or “widowed employees who are within the first year of a spouse's death”

IV

Married, both spouses receive an income

V

Married persons whose spouse has a higher income.

VI

Workers who have more than one job and own different tax cards (Lohnsteuerkarte).


NOTE: For tax class III (Three), both husband and wife should be registered and living in Germany. If the spouse is not living in Germany then Tax Class I (One) will be applied.

Tax card (Bescheinigung für den Lohnsteuerabzug): a short dictionary

  • Tax cards (Lohnsteuerkarte): every year you will apply for one of this at the local registry office (Rathaus or Einwohnermeldeamt) / Finanzamt.
    According to your personal status (marital status, dependent children, etc.), the card will indicate the tax class you have been assigned to. Generally, it is sent to your address automatically. If you don't receive it, you need to contact the local registry office or request it online.

  • "Bescheinigung für den Lohnsteuerabzug" reports all data of your responsible tax office (Finanzamt). It basically depends on your city of residence and your surname.

  • The income tax for all employees is deducted by the employer and forwarded to the responsible tax office (Finanzamt).

  • To claim any overpaid tax, you need to file a tax return in the next calendar year. This is assessed either by an annual wage tax settlement (Lohnsteuer-Jahresausgleich) or by an assessment application(Antragsveranlagung).

What’s the most frequent class for the expats?

The majority of non-residents fall into either Tax class I or III (One or three). If both partners are working then tax class IV will apply.

How many times can I change tax classes in Germany?

Formally, you have the right to change your tax class once per year. However, life events may cause a change in class either.

What events can change my tax class?

As mentioned above, you can change your Steuererklärung:  

  • If you become a freelancer, or you are in retirement, or during a parental leave or unemployed
  • If your partner works again
  • When one of the partners passes away
  • In case of divorce or separation
  • In case you have a child

When is worth it to make a change?

To check your and your partner current situation, you can use this German simulator. Here you have to enter both your gross salaries in it, together with your postal code. You will be able to see if it’s worth to make a tax class change in Germany.

Still not sure about your tax class and your tax return? Write to us and try to recalculate how much tax you paid last year: if the amount of your tax was higher, German tax authorities could owe you a refund!

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