How are the income tax brackets calculated

Gross Netto Calculator 2021: Calculate your net salary now

The gross-net calculator 2021 calculates the exact net salary of the previously selected gross salary.

How the gross-net calculator works

Our salary calculator shows you all taxes, such as wage tax or the contributions to statutory health insurance, which affect the net wage. The salary calculator also takes possible exemptions into account and gives you an overview of where you are moving with your gross or net salary in the wage table.

The solidarity surcharge, which will no longer apply to the majority of people in Germany in tax year 2021, is also taken into account. With the WirtschaftsWoche salary calculator, you can easily calculate your net and gross wages for the year 2021 online.

First select the tax year and the method of calculation in the gray box on the salary calculator. You can choose between the years 2019, 2020 and 2021 as well as the gross to net or net to gross calculation type. In the box "Information on salary", please select the desired period and the desired gross or net salary.

In the following box "Taxation characteristics" several details can be given. First, please select the income tax class. Then your state, your year of birth and whether you have children. The salary calculator also takes allowances into account in its calculation. These allowances include a possible monthly allowance and a possible child allowance. Select these exemptions accordingly.

You can also choose whether you have to pay church tax. In the last box on the salary calculator labeled “Pension Expenses”, select the type of your pension insurance and health insurance. Make your information as detailed as possible in order to achieve an accurate result. One advantage of our 2021 salary calculator is that the results are displayed immediately. The employer's burden is also calculated.

The more information you enter in the gross / net calculator 2021, the more precisely the wage calculator can calculate your gross salary or net salary for the respective tax year. In order to obtain a result, however, not all of the information in the gross-net calculator 2021 is absolutely necessary.

Gross-net calculator 2021 - go prepared for the salary negotiation

Go well prepared for your next salary negotiation with your calculated net salary. Please also take into account the wage index in your sector in your respective federal state. The wage index shows the average salary in an industry.

Various taxes and social security contributions are deducted from the gross wage in order to maintain the net wage. On the tax side, the wage tax, previously the solidarity surcharge and possibly the church tax, are deducted. The wage tax depends on the respective tax rate, which is levied on the gross wage.

The amount of the solidarity surcharge and the church tax depends on the amount of wage tax. The solidarity surcharge has so far been 5.5 percent of wage tax. This will no longer apply to the majority of people in Germany, as some changes will take effect this year.

From 2021, the solos will no longer apply to all employees who have a taxable income of less than EUR 73,000 (single) and EUR 151,000 (spouse) in 2021. Around 90 percent of all citizens in Germany are affected by these tax changes. The ten percent of people in this country who are above such an annual salary must continue to pay the solidarity surcharge. For everyone else, the elimination of the solis is noticeable in the net salary.

The church tax is either eight or nine percent of the wage tax (depending on the federal state). Leaving the church would also avoid this tax burden, so that this tax no longer affects the respective net salary. The social security contributions include pension insurance, health insurance and unemployment insurance.

Which income tax classes are there in Germany?

There are six tax brackets in Germany. The wage tax brackets differ in their respective tax exemptions and thus have a major impact on your net wages. In general, tax brackets I and II are intended for single, divorced or single people. Tax class II is aimed at single parents. Tax classes III, IV and V are intended for married people. In the case of married people, the spouse with the higher salary is usually suitable for tax class III. Tax class V is then assigned to the other spouse.

If both spouses earn roughly the same amount, it is advisable to choose tax class IV for both. Tax class VI is awarded if an employee is involved in additional employment.

Tax classes II and III contain the highest allowances. The basic allowance includes employees with tax class I or IV. No allowances are included in tax classes V and VI. So every euro earned is taxed.

The tax classes at a glance

Tax class I
  • Single
  • Divorced (in the year of separation you can choose another tax class)
  • Widowed
  • Married or registered partners whose partner lives abroad
  • Married couples permanently separated / registered partners
Tax class II
Tax class III
  • Sole wage earner in the case of married persons / registered life partners
  • Married or registered partners who earn significantly more than their partner (this is then to be classified in tax class V)
  • Important: Both partners live in Germany
Tax class IV
  • Married or registered life partners who earn roughly the same net income as their partner
Tax class V
  • Married or registered partners who earn less than their partner (this is then to be classified in tax class III)
Tax class VI
  • Employees with multiple jobs
  • tax class VI is indicated for employment with the lower salary.
  • The appropriate tax bracket (I-V) is charged for the position with the highest salary

What exactly is the tax credit?

The tax-free allowance, also known as the basic allowance, is the wage for which no income tax is levied. The annual tax-free allowance for single people in 2021 is 9,744 euros. For spouses who submit their tax returns together, a tax-free amount of 19,488 euros applies in 2021. In 2020 the tax allowance was lower. At that time, the limit was 9,408 euros for single persons and 18,816 euros for married couples assessed together.

What is the child tax allowance in 2021?

The child allowance was increased in 2021. The child tax allowance is currently 5,460 euros. The child allowance is offset against the basic allowance in order to reduce the taxable part of the income. Both parents are entitled to half of the child allowance, but it can also be transferred to one parent. In 2020, the child allowance was € 5,172, which is € 288 less.

What is the wage index?

The wage index differs in every federal state and every industry. The respective wage index indicates how much is earned on average in a federal state within an industry. This information can be particularly helpful if you are about to negotiate a salary.

From the information on the wage level, you know what average gross wage is paid in your branch in the respective federal state. From this, the respective net wage can then be calculated by the salary calculator. Therefore, it can be of great advantage for salary negotiations to know the wage index in your industry.

How can you improve your net salary in 2021?

There are a few ways to top up your net salary for 2021. On the one hand, employees with an annual gross wage of less than EUR 73,000 per year generally have more net this year, as the elimination of the solidarity subsidy has a positive effect. In addition, the church tax can be avoided by leaving the church - this could save several hundred euros annually in 2021.

Depending on the respective private situation, a change to another tax bracket could also be worthwhile in order to receive as much net wages as possible. A closer comparison of the advantages and disadvantages of the respective tax brackets is worthwhile here.

Wage index in Germany: an overview of the average income of Germans by sector and federal state.

Important: The information on married / registered partners given in the table is not mandatory. For example, a married couple or a registered civil partnership can also have the top earner classified in tax class V, and the lower-earning partner in tax class III. At first glance, this does not make sense (the current tax burden is too high for the time being), but it can be advantageous because other benefits such as parental allowance may be calculated based on the net income of the poorer-earning partner and he will then ultimately receive more.

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