Salary calculator Germany – this is how much you really earn
Each country has its own taxation system. Using a salary calculator for Germany is a great way to understand how wage tax is applied, and which social contributions are due. Here, you can use one of the clearest calculator around, as well as a guide below with links to relevant guides in each section.
Enter your gross salary in the field to start. Feel free to ask questions in the comments if you have more questions using this net salary calculator for Germany.
Calculator provided by Arbeitnow.
About this German salary calculator
This German salary calculator is designed to give you a pretty good estimate of how much you can expect to take home after taxes and social contributions based on your tax class and other factors. However, please keep in mind no calculator is 100% accurate. Other possible external factors may have an effect on the final number.
When is a salary calculator for Germany useful?
The most obvious use for a wage tax calculator in Germany is to determine how much money you can expect to land in your bank account after subtracting taxes and contributions when starting a new job. Another way of saying this is that it allows you to determine your net income from your gross income. There are also other scenarios in which a German salary calculator is useful. These include:
- If your social security contributions or the tax rate change
- You switch from public to private health insurance
- You get a raise at your current job
- You receive a benefit such as a company car and want to see how it will affect your tax
- Something has changed in your personal life – such as getting married, having kids, leaving the church, or moving to a state with different tax regulations
Salary calculator Germany: what factors into calculations?
Employees are obliged to pay income tax every time they earn a salary or wage – these include taxes, such as income, solidarity and church tax, and social security contributions, such as pension, healthcare, long-term care, and unemployment insurance. These, along with a number of other factors, will determine how much money you take home at the end of the month.
Below we’ll take a look at all of these factors in detail.
Tax class (Steuerklasse)
In Germany, there are a number of different tax classes that are taxed at different rates. The tax class that you belong to is going to have a significant impact on how much tax you pay and the types of taxes you pay. It’s based on family status.
The following tax classes exist:
- Tax class I – this includes single, divorced, widowed, or permanently separated people.
- Tax class II – this is for single parents who are entitled to a small support stipend from the state.
- Tax class III – this is for married or registered couples where the partner earns up to 60% of the family income. Widows and widowers can still make sure of this tax class until the year after the death of their spouse.
- Tax class IV – This is for married or registered couples if both partners receive equal wages.
- Tax class IV with factor – This is for married couples who earn different wages, but want to avoid having to pay back taxes that would result from a change to the combination of tax classes III and V.
- Tax class V – This is for a spouse with the lower salary in a married couple where the other spouse would be registered for tax class III.
- Tax class VI – this applies to employees who have additional jobs on top of their primary employment. Generally, this tax class gets the highest deductions as there are no tax exemptions. In this case, the employee’s main job remains in tax class I, but every other partial employment remains in tax class VI.
Tax-free allowances (Freibetrag)
There are a number of monthly expenditures that can be offset against your gross earnings to reduce the amount that you have to pay tax on. These are called tax-free allowances and can be factored into your monthly wage rather than waiting until a tax return is declared to claim back. Tax-free allowances include:
- Costs for childcare.
- Travel costs to and from work up to €920 per year.
- Employment expenses (unless already reimbursed by an employer).
- Relocation expenses.
- Alimony payments to divorced or separated partners.
- Charitable contributions to German charities.
- Expenses for education or schooling.
- Social security contributions.
- Church tax.
- Mortgage interest payments (buy-to-let mortgages only).
You can simulate some of those by changing options on our salary calculator for Germany.
Church tax (Kirchensteuer)
In many parts of the world, churches collect money from their parishioners through voluntary tithing – in Germany, it’s done with taxes. This is called the church tax or Kirchensteuer and amounts to 8% of your income tax in Bavaria and Baden-Württemberg, and 9% everywhere else in Germany. If you’re earning 60,000€ annually in Berlin, that means you would pay about 1040€ church tax per year.
There are a number of different religious organizations that collect church tax in Germany:
- Evangelical Regional Churches
- Catholic Church
- Old Catholic Church
- Jewish Religious Communities
- Israelite Religious Communities
- Free Religious Communities
- French Church in Berlin
- Mennonite Community in Hamburg-Altona
- Unitarian Religious Community of Free Protestants in Rhineland-Palatinate
If you’re not a member of any of these communities, then you don’t have to pay church tax. If you are but don’t want to pay the tax, the only way out of it is to officially leave the church.
Health insurance (Krankenversicherung)
Everyone in Germany has to by law pay for health insurance. If you’re working for a company, your contribution is split equally between you and your employer. Currently, the health insurance contribution rate is 14.6% of your income. This means that you will pay 7.3% and your employer will pay 7.3%.
If you’re a freelancer or earn more than 66,600 € annually (gross), then you have the option of signing up with a private insurance company or voluntarily contributing 14% of your income to public health insurance.
Solidarity tax (Solidaritätszuschlag)
Since 1991 Germany has levied a solidarity tax or Solidaritätszuschlag which was used to cover the costs of reuniting Germany and putting the former east and west on equal footing.
From 1998 the solidarity tax has been 5.5% of the income tax for all taxpayers. From January 2021, however, the solidarity tax will only be applied to income from taxpayers who earn more than €62,127 (€124,255 for married couples) per year. Anything less than this and the solidarity tax does not apply.
Our German salary calculator will automatically apply the right level of surcharge, if applicable.
Long-term care insurance (Pflegeversicherung)
All German taxpayers are obliged to contribute to a long-term care insurance system. This helps ensure that they continue to receive quality healthcare once they’re old and no longer working. If you’re contributing to a public health insurance scheme then you will automatically be enrolled in long-term care insurance. As of 2022, the contribution is 3.05% of your gross income; if you don’t have any kids, you pay an additional 0.25% on top of that.
The maximum amount that you can pay is €4,837.50 monthly, split equally between you and your employer.
Region (Land)
Different federal states in Germany have different taxation rates, so the state that you choose is going to have an effect on your final income amount. This is something you can play around with the salary calculator for Germany above.
Year of birth
Your age is another category that can affect your income. Tax residents older than 64 can benefit from what is known as retirement relief or Altersentlastungs. This means that your income will be taxed at a slightly lower rate but does not apply if you are a pensioner. The amount of tax deduction that your receive is dependent on your age, but it won’t apply if you’re under 64.
Childcare allowance
Under certain conditions, you as a parent can claim tax-free childcare allowances from the German government. From 2023, this is 6024 euros per child.
You’re also eligible to deduct childcare expenses and school fees, but these will be balanced against the child benefits you are already receiving. If they outweigh your childcare benefits then there won’t be any effect.
You can see the impact of child allowance on your net wage by indicating the number of children you have in our German salary calculator.
Pension insurance
Germany uses a comprehensive public retirement insurance system to ensure that workers set aside money for their old age and retirement. For employees of a German company, participation in this scheme is mandatory, with premiums deducted by the employer. Premiums are 18.6% of a worker’s gross monthly salary, with the employee paying half and the employer paying the other half.
Unemployment insurance (Arbeitslosengeld)
Between getting fired, being made redundant, or losing your job due to an act of God (looking at you, Covid), there’s no shortage of ways to find yourself unemployed. Luckily the German government has a fund set up to cover you in the event that you find yourself without work, and you have to contribute towards it. The contribution amount for unemployment insurance, or Arbeitslosengeld, is 2.5% of your gross income.
Tips to increase your net wage
After using a salary calculator for Germany, you might be surprised about how much of your gross income you are giving away. There are a number of ways to reduce deductions from gross income:
Change public healthcare providers
One of the biggest premiums that get deducted from your monthly salary is the chunk that goes to healthcare. While other social contributions such as state pension, long-term care, and unemployment insurance are charged at a fixed percentage of your wage, you can save money on healthcare by switching from a public to a private provider. However, there is a catch. To do this, you either have to be switching into a freelancer or self-employed role, or be earning over 66,600€ per year.
It’s also difficult to pinpoint exactly how much you stand to gain by switching, as it differs on a case-by-case basis. While the price you pay for public health insurance is based on a percentage of your earnings, private health insurance premiums are determined by a number of different factors including your entry age and if you have any pre-existing health conditions. But if you are in good health and eligible for private health insurance, you stand to save a lot of money.
Opt out of church tax
Since paying church tax is completely optional, you can save a quick 8% or 9% of your paid income tax (depending on the state in which you live) by heading down to your local Bürgeramt and opting out. However, as we mentioned above, you do have to officially leave your church or place of worship.
You can use the salary calculator for Germany above to see how much more you would earn without church tax.
Submit your tax return and claim tax-free benefits
As a worker in Germany, both employed and freelance, there are a number of benefits that are tax-deductible and can be reclaimed when doing your tax return.
While freelancers and the self-employed will be very familiar with submitting tax returns, it’s not obvious for most employees whose employers take care of all tax filings for them. That being said, there’s a chance that you might have still paid too much tax throughout the year even if you are an employee, so it’s important that you claim that money back by submitting a tax return to the tax office (Finanzamt).
While doing so, there are a number of work-related reimbursements that you can claim, offsetting your profit and ultimately resulting in more money for you at the end of the day. These include:
- Reimbursement of travel expenses (including train tickets, kilometers traveled in a car, and kilometers traveled on a bike).
- Any sort of work-related training or course.
- Tools, software, and communications devices (this includes your cellphone, mobile data, and internet if they’re used for work-related purposes).
- Business meals and business trips.
- Work-related legal services and advertising.
Consider a change of tax class
Changing your tax class can be one of the quickest and most effective ways of increasing your net income, depending on what your current tax class is and the tax class you’re transitioning to. Changing from tax class I to tax class III, for example, would save you around 9% of your gross income.
Changing tax classes is possible only once a year and must be made by the 30th of November at the latest except if one of the reasons for a tax change applies to your situation:
- You or your partner are no longer considered employees or your hiring status changes
- You or your partner go from being a freelancer to an employee again
- You or your partner dies
- You and your partner get divorced or separated
This is something you can easily simulate with our German salary calculator.
I hope this salary calculator for Germany will help you make decision about work life, a mortgage, or simply evaluate your desire to move to Germany.
Bastien
Salary calculator Germany – FAQ
A number of taxes & social contributions are taken from your gross salary in order to get to your net salary. Tax-wise, the following taxes can be applied: wage tax, solidarity surcharge (if you earn more than 74K€), and church tax (if you didn’t opt out).
On the contributions side, some of your gross income goes toward health insurance, pension & care, unemployment insurance.
Additional factors include family status, number of children, age & tax class
An instant rough “guesstimation” is to apply the 1/3 rule. Typically, expect to be able to keep 2/3 of your wage as a net salary, with 1/3 of it going towards taxes & contributions.
This gives you a pretty good idea. For a more precise estimate, it’s best to use a salary calculator for Germany, like the one above in this post.
Online calculator for salary in Germany can give you an estimation of your net salary with a relatively high level of accuracy and confidence. However, some parameters are hard to factor in and the end result will probably differ in reality.
As an employee, your share of compulsory contributions towards welfare are the following: health insurance (around 8% of gross income), pension (around 9,3%) & care (around 1,7%), unemployment insurance (1,2%).
Some of it may vary depending on your level of income and whether you can opt for private health or care insurance.
Besides using an online calculator, the only real accurate way to answer this question is to wait for your first payslip. On each payslip, your employer will list each contribution & tax you’ve made.
There are a number of sources you can use to estimate the right level of income for your case. Many of the tips listed on this guide on salaries in Berlin are applicable Germany-wide.
