Calculating the total income (Gesamteinkommen)
Add up all your income sources:
Your annual salary
Income from rentals
Profits from self-employment
Dividends from shares, bank interest
Etc.
Deducting allowable expenses (Werbungskosten & Sonderausgaben)
Certain expenses can be deducted in order to reduce your taxable income:
Commuting costs to work
Insurance contributions (health, pension, long-term care, etc.)
Study or vocational training expenses
Donations
Childcare costs
The result is called the taxable income (zu versteuerndes Einkommen).
Applying the tax scale (Steuertarif)
The following tax rates apply for 2025 (approximately):
Annual taxable income (single person)
Up to €11,604 → 0% (tax-free)
€11,605 – €16,000 → starting at around 14%, increasing progressively
€16,001 – €66,760 → progressively increasing up to 42%
€66,761 – €277,825 → 42%
More than €277,826 → 45%
In practice, precise mathematical formulas issued by the Ministry of Finance are used.
However, there are online tools that make the calculation easier, such as a Brutto-Netto-Rechner (gross–net calculator).
Deducting personal tax allowances (Freibeträge)
Some people are entitled to additional allowances, for example:
Child allowance (Kinderfreibetrag)
Allowances for unemployed people or senior citizens
Allowances for people with disabilities
Calculating the solidarity surcharge (Solidaritätszuschlag)
This is usually 5.5% of the income tax but is only charged on higher incomes.
Calculating church tax (Kirchensteuer)
If you are registered as a member of a church, you pay 8% or 9% of your income tax as church tax (Kirchensteuer).
Simple practical example:
Single employee with annual income: €40,000
Deductions: €2,000
Taxable income = €38,000
The tax scale is applied, leading for example to:
Income tax ≈ €6,000
Plus 5.5% solidarity surcharge = €330
If a church member: €540 in church tax (Kirchensteuer)
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The editorial team of our website strives to provide accurate information based on extensive research and consultation of several sources. Nevertheless, errors may occur or certain details may be uncertain. Therefore, please regard the information in these articles as an initial reference only, and always contact the relevant authorities to obtain binding and up-to-date information.
