What taxes do employers have

Income tax in Germany: How gross becomes net

The amount of wage tax depends on the respective wage tax class of an employee. This is mainly based on his Income and his social circumstances, especially his marital status. There are six tax classes:

  • Tax class I: Singles
  • Tax class II: single parents
  • Tax class III: married (the higher-income partner)
  • Tax class IV: married (both partners earn roughly the same amount)
  • Tax class V: married (the lower-income partner)
  • Tax class VI: part-time job

Depending on the class, the Income tax only from a certain monthly income to be paid. So you can z. B. in tax class I do not earn more than 1,029 euros gross before wage tax is due. Employees from tax class III have to pay wage tax if their gross monthly salary is over EUR 1,952.

Furthermore, various tax exemptions apply to the various tax brackets, which the employer automatically takes into account when deducting income tax. Employees benefit, among other things. from a basic tax allowance of 9,000 euros per year (9,168 euros from 2019), many can also claim one or more child allowances, single parent relief or a flat-rate employee allowance to alleviate their tax liability.

Beyond the monthly income limits and regardless of tax exemptions, the principle of Tax progression: Those who earn little also pay little wage tax - and vice versa. The different high tax burdens that result from this can be illustrated using two examples:

  • Matilde is 25 years old, single and childless. In her job in a marketing agency, she earns 2,500 euros a month gross. The employer keeps this 299.50 euros wage tax a. Since Matilde is not a member of a church, she does not have to pay any church tax, but a solidarity surcharge of 16.47 euros and social security contributions of 515.63 euros. What remains is a net wage of 1,668.40 euros.
  • Paul is 35 years old, married and the father of one child for whom he is entitled to the child allowance of 7,428 euros (as of 2018). His wife also works and earns a little more than Paul. Both have chosen tax class IV. From his salary of 3,500 euros, he has to 559 euros as wage tax pay. The soli in his case is 25.28 euros. Since he is also baptized and a church member, he has to pay church tax of 41.37 euros. Offset against his individual social security contributions (713.13 euros), Paul comes to a net income of 2,161.22 euros.

Since the employer is responsible for calculating the wage tax and this appears on the pay slip anyway at the end of the month, there is usually no reason for employees to do the calculation themselves. Anyone who is still interested can electronic computer programs how to use the wage and income tax calculator of the Federal Ministry of Finance. This also enables complicated calculations to be carried out - e.g. B. for married couples for whom the so-called spouse splitting or the factor method must be used.