Tax Class (Steuerklasse) in Germany
Simplified, Tax Class (Steuerklasse) defines how much income tax the employee has to pay to the government.
How many Tax Classes are there in Germany?
In the German income tax system, you can find 6 Tax Classes (Steuerklassen), which are determined based on an individual’s personal circumstances.
Tax Class (Steuerklasse) is shortened from Income Tax Class (Lohnsteuerklasse).
These are the tax classes in Germany:
- Tax Class 1 (Steuerklasse 1) – for single, widowed, childless, or divorced
- Tax Class 2 (Steuerklasse 2) – applies to single parents
- Tax Class 3 (Steuerklasse 3) – for spouses with significantly higher incomes (spouse with lower income automatically receives Tax Class 5)
- Tax Class 4 (Steuerklasse 4) – if both spouses have a similar income
- Tax Class 5 (Steuerklasse 5) – for spouses with significantly lower incomes (spouse with higher income receives Tax Class 3)
- Tax Class 6 (Steuerklasse 6) – in the case when there are second taxable job or earn high income from self-employment
Tax Class 1 (Steuerklasse 1)
The following employees are grouped in Tax Class 1:
- Married, they don’t live together anymore
- Married, but their partner lives in a non-EU country
Tax Class 2 (Steuerklasse 2)
Tax Class 2 is for single-parent employees. The prerequisite for Tax Class 2 is that at least one minor child lives in the household for whom child benefit or a child allowance is claimed and that no other adult lives in the same household who could also act as a legal guardian.
Single parents belong in Tax Class 1 because they are considered single at the same time. However, the state takes into account the tax advantage through tax relief for single parents according to Section 24b of the Income Tax Act (Einkommensteuergesetz or EStG).
Tax Class 3 (Steuerklasse 3)
Tax Class 3 applies to married employees with children (recipients of parental allowance) but the spouse must choose Tax Class 5.
Tax Class 3 includes employees:
- with a registered civil partnership
- who are married (minimum income of €520)
- widowed (in the year of death + the following year)
Tax Class (Steuerklasse) can be changed several times a year. You can change your tax class on the ELSTER website.
Only if one of the two spouses earns significantly more than the other (at least 50%) does it make sense to switch to the combination of Tax Classes 3 and 5. Otherwise, married employees are initially automatically sorted into Tax Class 4.
Tax Class 4 (Steuerklasse 4)
Steuerklasse 4 ist für Verheiratete mit gleichem oder ähnlichem Einkommen. Beide Ehegatten müssen unbeschränkt einkommensteuerpflichtig sein und dürfen nicht dauernd getrennt leben.
Tax Class 5 (Steuerklasse 5)
Tax Class 5 applies if both spouses are employed and one of them has chosen Tax Class 3. The prerequisite is that both spouses are employed, one of them has chosen Tax Class 3 and there is a minimum income of €520. Anyone who opts for Tax Class 5, however, cannot claim a basic allowance or a child allowance. The pension flat rate, the employee flat rate, and the special expenses flat rate remain unaffected.
Tax Class 6 (Steuerklasse 6)
Tax Class 6 applies to employees if they receive wages from more than one employer. If you have two jobs and earn more than the tax-free €520 (Minijob) per job, you need a second tax class.
Tax Class 6 (Steuerklasse 6) is the only tax class in which marital status is irrelevant.
For example, if you have a main job and a side job, the main job is in Tax Class 1, 2, 3, 4, or 5 and the side job is automatically in Tax Class 6.
The web site ELSTER is a digital entry to the official German tax office.
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