Taxes in Germany Explained | Income Tax, Tax Classes, Church Tax, Solidarity Tax

[@Waleochronicles]

I like the way you simplified the tax classes. Looks like the system is trying to punish single folks and people with multiple income 😄

[@PerFinEx]

You‘re right. And people who earn more, because they have a higher tax burden (like almost anywhere else in the world).

[@annehathaway6922]

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[@shiva5774]

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[@jcamezquita79]

Love the German dry sense of humor. Cheers from a Colombian living in the US!

[@PerFinEx]

A Colombian living in the US watching a video on income tax in Germany. Love it! - Axel

[@clinicalpsychologist]

they dont have dry humor... sorry, but you must educated yourself more. Like traveling.

[@shiva5774]

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[@TradingWithCJ]

Nice breakdown mate! Keep up the great work! Just catching up with missed vids 👊🏼

[@PerFinEx]

Was cool to talk to you earlier this week in the live stream. 👍

[@annehathaway6922]

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[@surreallife777]

I was watching a video on German tax rates and the host said the tax rate in Germany is 55%. This is incorrect. As you said if you’re making under €9700 you don’t pay any tax. The 55% tax rate applies to the highest income earners. Also, it is a nominal tax rate. If for example somebody’s making under €10 million per year they pay lower tax rate but once they get over €10 million a year they pay 55% tax rate on whatever they make after €10 million. So if they made €10 million they are taxed at a lower tax rate, not 55%, but if they make over €10 million, for example €10,100,000 then they pay 55% on that extra $100,000. The rest of the €10 million is taxed at a lower tax rate, which is called a nominal tax rate. I don’t know the specific numbers I’m just using this as an example. Can you do a video or explain to me how the nominal tax rate works for different income levels, not just the very rich but at all income levels and do all income levels have nominal tax rates? For example somebody making €50,000 per year would pay the lower tax rate on that €50,000 but if they made €51,000 they would pay a higher tax rate on that extra €1000. Another words they would be text differently on those two incomes. A different tax rate of €50,000 and the different tax rate on the extra €1000. Nominal tax rate.

[@PerFinEx]

You are correct. Everyone in Germany can make 9.984€ in 2022 completely tax-free. After that you will be taxed with a maximum percentage of 45% if you earn more than 277.826€/year as a single person (Attention: taxable income and not gross salary). With your 55% you might be referring to all other deductions you have from salary in Germany. All explained in this video: kzbin.info/www/bejne/faHagJ-ondKXmpI The difference of average tax rate vs marginal tax rate is explained in the video starting 05:04. You can also see you own tax rates with the official calculator here: www.bmf-steuerrechner.de/ekst/eingabeformekst.xhtml

[@zebenksciukas]

Hey! Would be great a video focused more on taxes for Selbständiges! Also VAT tax in Germany and EU

[@PerFinEx]

Noted! Anything specific for taxes for self-employed you'd like to see?

[@annehathaway6922]

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[@jessicaallen9006]

Nice video!! Very engaging from beginning to end. Nevertheless, businesses and investment are the easiest way to make money irrespective of which party makes it to the oval office....

[@junedwayne873]

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[@patrickwood3922]

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[@mattylite7]

The church tax was the one thing I had no idea still existed in the 21st century 🥵

[@PerFinEx]

"German efficiency" 😂

[@annehathaway6922]

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[@willkommen2861]

Do not fill any church form!

[@pedroaalmeida96]

Very good video!! I just didn't understand like in the example of almost 60k/year he pays 26.8%, how would it be different depending on the tax class he is in?

[@PerFinEx]

Tax classes make a difference in how much taxes we have to pay on a monthly basis (from our payslips). At the end of the year tho, we all have to pay the same taxes (independent of the tax class). As this may be a complicated concept to understand, we better answer this in a video.

[@pedroaalmeida96]

@@PerFinEx Please do! Because if everyone with the same gross salary will pay the same %, I cannot see the difference the tax classes would make. Thanks for the reply!! Great Channel!!!

[@PerFinEx]

Will do!

[@ihezietochi6220]

Well Explained, how Bad is Tax class 5 for a Student that is married and have a working student Job. What is the percentage being charged in this case

[@PerFinEx]

This calculator will answer give you the exact numbers: www.brutto-netto-rechner.info/

[@annehathaway6922]

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[@stjepanmikus5567]

08:47 Did he really said this? hahahah. I want this guy to do my taxes. Nice video by the way.

[@PerFinEx]

Thank you very much. We can recommend you a tax advisor, but we are no tax advisor ourselves.

[@shiva5774]

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[@anjanbabu1873]

If my income is 3000 euros per month,should I pay tax

[@PerFinEx]

Yes, according to the graph in the video.

[@annehathaway6922]

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[@amandawoodward5596]

As an American, taxes are scary and I feel we (Americans) pay taxes on almost everything (sales tax, property tax, personal property tax(i.e. car) and various others). I'm curious how many other taxes Germany has and how much does a German get back during tax return (assuming this is a thing in Germany). I personally don't like the thought that if I lived in Germany, I would pay almost half my paycheck even as (what I consider and assume) what could be low income. As an American I make less than 40K USD a year and that is kind of hard to live off depending on where you live and what kind of bills you have and if you are the only working person in your household. I wonder, does Germany have any assistance programs for those who struggle to afford the cost of living (groceries, rent, certain bills)? It does appear that everyone is taxed equally so that is interesting.

[@PerFinEx]

Here is a video that shows how much taxes we REALLY have to pay here in Germany: kzbin.info/www/bejne/faHagJ-ondKXmpI

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[@mrsOlivia150]

@Svetlana Shebchuk God bless 🙏I'll write her Asap...

[@marisagomes8826]

What about a couple in a civil partnership? Is it taxed like a married couple?

[@sanandadutta2433]

Can you please tell me how to change the tax class in Berlin? I am currently living alone, but my husband will be joining me next month and he is not working right now.

[@PerFinEx]

Changing tax classes is usually done in the city council or Finanzamt directly.

[@shiva5774]

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[@niharlathiya]

Great explanation about German tax I have ever seen🙂 Just had small doubt : as you said, if one is making 58827 euros gross per annum he will pay 26.8% tax right? But is that all ? Only this 26.8% will be deducted from his salary or he have to pay other contributions as well like pension insurance, health insurance etc.

[@PerFinEx]

Thank you for the kind words. 🙃 The (up to) 42% are just taxes. Every employee has to pay into Social Security as well (more info here kzbin.info/www/bejne/l2jOiIKBodWViM0)

[@annehathaway6922]

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[@m.farhana.rahman3372]

Anyone knows how do you calculate taxes if you got both self-employed and employed job (eg part time). I know for employed the employer will pay half of the medical insurance cost. So, how does it effect the medical tax when you also have self employed?

[@PerFinEx]

Great question. As self-employed people have no employer, they have to pay health insurance (& all of social security) completely on their own. That's why many self-employed exit from social security (e.g. public pension) and switch from public health insurance to private health insurance.

[@m.farhana.rahman3372]

@@PerFinEx but I believe private insurance will be super expensive for old people, or for people who are retired in Germany. People always say to get public insurance for people who are planning to live permanently in Germany

[@PerFinEx]

That is one of the biggest myths about private health insurance in Germany. Axel is talking about the facts in those 2 videos: kzbin.info/www/bejne/j3zLgICFgdWbd9E & kzbin.info/www/bejne/eoSkZKebhMSIiqc

[@m.farhana.rahman3372]

@@PerFinEx I assume best is to talk to the health insurance company and see what is best

[@PerFinEx]

That is exactly the key question: Which private health insurance company and which private health insurance contract is best for you? And that depends on many different factors like age, coverage you want, deductible, etc.

[@RikuLeppanen]

The church tax percentage seems very high in Germany. In Finland it is 1%.

[@sancho7198]

if you got an offer of 100k per year would you go to Germany? I don't know German yet but they pay for my lessons. It's just kinda demotivating thinking about the amount of taxes I would need to pay

[@PerFinEx]

The real amount that is deducted from your salary is calculated in this video: kzbin.info/www/bejne/faHagJ-ondKXmpI There are a lot more deductions than "just" taxes. The decision to come to Germany or not shouldn't probably be solely focused on income. There are a lot of other factors that should decide where you spent your life. Good luck figuring it out!

[@gtandme1869]

Do you have a good source for median and average household income for Germany? I would love household income by quintile

[@PerFinEx]

Here's an interactive graph from the German Economic Institute: www.iwkoeln.de/presse/interaktive-grafiken/beitrag/wer-verdient-wie-viel.html You can adjust your net income and see how you compare to all Germans, or other sub-groups.

[@annehathaway6922]

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[@xaviercrow6997]

Not sure where she got this information from, but my step mom told me that German people lose, and therefore have to rebuy, their personal belongings as part of the tax process. That honestly sounds a little ridiculous, anyone know what could have made her come to this conclusion?

[@shiva5774]

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[@XxLyrokxX98]

I like the extra but suttle anime touch

[@PerFinEx]

Thank you so much!

[@ankurraikar2533]

Fantastic video. Nicely explained. One quick question, at 3:40 in the video, what if my spouse is staying in a Non EU region. And she is planning to come to Germany in next 6 months? Which category will I fit in?

[@PerFinEx]

Please ask your local Finanzamt (tax office). They will give you the most reliable answer as they decide on your tax situation.

[@hardopinions]

When she comes to Germany, then you are treated as entire year as together which means income split. You only have to live at least 1 day together, so as long as she's here before the end of the year.. Tax classes also mean nothing really. You pay taxes on assessment anyway and get refund or pay extra. And until you are together, you get Steuerklass 1 and then you'll get 4 when she's registered. Registration date matters, not date of arrival, so don't delay.

[@annehathaway6922]

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[@davidgruty]

Hi I didn't get the difference between the marginal and average rates. Hans (from your other video) is not paying 26%

[@PerFinEx]

Please see the graphic at 07:58. Marginal tax rate determines how every € in itself is taxed. E.g. the 1€ from 60.000€ to 60.001€ is taxed with 42%. Average tax rate determines how the entire income from 0€ to 60.001€ is taxed as the average of all marginal tax rates.

[@annehathaway6922]

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[@akormendy]

@@PerFinEx Thanks so much for the videos you are making! I am still wrapping my head around the formulation of the Graphic @7:58. Is there a formula, or procedure that I can follow to create that graph? after searching all the top expat sites, it seems there is no good guidance on this. It seems that everyone relies on these "calculators" but these are all with regard to withholding taxes and not actual. Would you have any insight that you can offer?

[@PerFinEx]

Thank you very much for watching! This is the official calculator of the German Ministry of Finance to calculate your income tax rate. Is this what you are looking for? www.bmf-steuerrechner.de/ekst/eingabeformekst.xhtml

[@akormendy]

@@PerFinEx Ha! Finally, that is exactly what I was looking for. Thank you for solving a big mystery about the German tax code!

[@mrtm4818]

hello, I've been living in nrw state in Germany for 7 months, but I'm a Turkish citizen...I want to trade in the crypto market Everyday..how is the taxation going?? How is the taxation when you earn one thousand Euros, ten thousand Euros or fifty thousand Euros per month? thank you 🙏

[@PerFinEx]

All info how different sources of income (including trading crypto) are taxed in Germany can be found here: kzbin.info/www/bejne/eqaQk5xqjqihjcU

[@nomadd27828]

Sadly single people aren't spared or celebrated in any society :/

[@omar-zk8vj]

I have a question please .... I'm a Yemeni citizen and i have money in bonds in Yemeni banks and it gains interest every year and i pay taxes on the interest here also ... now i am about to travel to germany for higher studies as a doctor for 5 years .. now the question is do i have to pay any tax for the money i gain in interest in my home country during those 5 years ?

[@PerFinEx]

For personal tax questions please reach out to a professional tax advisor.

[@annehathaway6922]

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[@yulinheo3136]

Well, not surprising for me. We pay more in here, Australia.

[@shiva5774]

Dm via telegram 👆👆👆 Dm fr more information

[@graceful_songs]

Paying taxes is part of being an adult? how come! depends who what!

[@PerFinEx]

Well, try not paying taxes as an adult and see what happens. 😁

[@التقى-ه5ص]

ممكن مصادر عن النظام الضريبي لليهود والمسيحيه

[@shiva5774]

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[@plata6208]

fuck german taxes i’m moving to the us

[@shiva5774]

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