How Does Marriage Affect Your Taxes in Germany

Germany gives deliberate preference of tax return to married couples. In Germany, your taxable income tax depends on three things:

  • Your marital status.
  • Your social institution, and
  • The amount of your income.

The marital status of an individual is further divided into 6 other tax classes which are referred to as:

  • Steuerklasse 1 – Unmarried or permanently separated
  • Steuerklasse 2 – Single parents
  • Steuerklasse 3 – married Employees
  • Steuerklasse 4 – Married couples and civil partners
  • Steuerklasse 5 – job holders
  • Steuerklasse 6 – everyone with a second job

Each of these tax bracket are referred to as Steuerklass. So your marital status is central to how much tax you would end up paying in Germany.

First the Steuerklass 1, that is the tax class for single (unmarried), and permanently separated, people in this category pay the highest income tax rate, which is about 42% of your annual salary.

The second Steuerklassis available for single parents who live alone, in this tax category, applicants have the opportunity to apply for tax relief.

The third Steuerklassis is available for married couples who have relatively different income level especially when one partner is earning more than the other. The partner who earns less comes under the Steuerklass 5.

The fourth Steuerklass is for married couples who want to apply for tax splitting thereby saving money. This is possible for couples where one partner earns a tax rate that is lower than the other partner. As a couple, they can apply to continuously and jointly pay the percentage of the lower tax rate.

The fifth class is for married couples in a civil partnership as noted in the 3rd class.

The sixth Steruerklass applies to everyone regardless of your marital status when you hold a second job.

 

To summarize, in Germany more preference is given to married couple in tax reprieve than the rest of the population. Take a look at the tax brackets for singles and couples in Germany

 

Taxable Income Tax Rate
Single Married Single Married
8,652 17,305 Tax free Tax free
53,665 107,330 14% 42%
254,446 508,892 42% 42%
>254,446 >508,892 45% 45%

2016 tax rate, source: http://www.howtogermany.com/pages/germantaxes.html

 

Forms To Fill When Filing for a Particular Class as a Married Couple

If you just got married, divorced or are a single parent, you may want to request a change in the status of your Steruerklass. In trying to do that, you will need to fill the Steuerklassenwechsel form, once it’s filled, sign it and deliver it in a Finanzamt. You don’t need to schedule an appointment. Once the process is properly done, within 30 days your tax class would be successfully changed.