Admin

Tax Classes

Understanding Tax Classes in Germany

When you work in Germany, various deductions are taken directly from your gross salary before you receive your net salary. These deductions include taxes and social security contributions. You can see how much is deducted on your payslip. To get an idea in advance, you can use online gross-to-net calculators.

Tax Classes in Germany

In Germany, employees are classified into different tax classes based on their life and employment situation.

Tax Class 1 – For Single Individuals

This is the default tax class for single employees. It includes:

  • Singles
  • Widowed individuals (after one year since the spouse's death)
  • Divorced individuals without children

It also applies if:

  • You are still married but your spouse lives abroad
  • You are permanently separated from your spouse
  • Your ex-spouse applies for Tax Class 2 to raise the children alone

Tax Class 2 – For Single Parents

Designed to support single parents with minor children. You can switch to Tax Class 2 if:

  • You live with your child in a shared apartment
  • You are entitled to child benefit or child allowance
  • No other adult lives with you in the household

Tax Class 3 – For Married Couples with Tax Class 5

Applies to married employees who:

  • Are married or in a registered civil partnership
  • Have a minimum income of €520
  • Are widowed (in the year of death and the following year)

When combined with Tax Class 5, this class offers lower tax deductions, resulting in more net income.

Tax Class 4 – For Married Couples with Similar Incomes

Applies to married couples with roughly equal incomes. Both partners must be subject to unlimited income tax liability.

Since 2010, couples can choose Tax Class 4 with a factor to fine-tune their deductions.

Tax Class 5 – Paired with Tax Class 3

Tax Class 5 can only be used in combination with Tax Class 3. If one spouse chooses Tax Class 3, the other must choose Tax Class 5.

  • Taxed from the first euro, leading to significantly reduced net income
  • Personal allowances are shifted to the spouse in Tax Class 3
  • Despite higher tax deductions in Tax Class 5, the couple may benefit overall if their incomes differ significantly

Tax Class 6 – For a Second Job

Applies to individuals with multiple employers. Marital status is irrelevant.

  • The main job receives Tax Class 1–5
  • The second job is automatically taxed under Tax Class 6

When Is It Worth Changing Tax Classes for Married Couples?

Consider changing tax classes when your income situation changes, for example:

  • Starting a new job with significantly different income
  • Pregnancy or plans to apply for parental allowance

Parental allowance and maternity benefits are based on income during the relevant period before birth. A higher net income can result in higher benefits, so changing tax classes early may be beneficial in some circumstances.

How to Change Tax Classes

You can change your tax class through your local tax office:

  • Submit the form "Application for Change of Tax Class for Spouses"
  • Newlyweds may also need to provide a family register
  • You can also submit the application online via My Elster

Whether you switch from 4/4 to 3/5 or vice versa, the same form is used for the change.

Tax Class and Family Reunification

Before Family Reunification

If you move to Germany alone at first, you will generally be placed in Tax Class 1:

  • Intended for single individuals
  • No tax class benefits based on a spouse or children
  • Results in higher tax deductions compared with some married-couple tax class combinations

After Family Reunification

Once your family joins you:

  • You may be eligible for joint tax assessment
  • This can result in a lower overall tax burden depending on your circumstances

To update your tax class:

  • Submit a change request to your local tax office
  • The residents' registration office will also notify the tax office when your family registers
  • Additional documents, such as your spouse's registration or income information, may be requested

Final Tips

Choosing the right tax class is an important step when moving to Germany, especially if your family joins you later.

  • Inform yourself early
  • Apply for changes promptly
  • For questions or complex situations, consult a tax advisor
movein24