What is the tax class (Steuerklasse) in Germany?

Introduction

The tax class (Steuerklasse) is a classification system used in Germany to determine how much tax a person has to pay based on their personal and family situation. Every employee is assigned a tax class according to factors such as marital status and the number of children. This system helps employers calculate the amount of wage tax to be deducted from the employee’s salary and transferred to the tax office.

What are the tax classes in Germany?

There are six main wage tax classes (Lohnsteuerklassen) in Germany. Employees are assigned to one of these classes depending on their personal circumstances:

1. Tax Class I:
   Applies to single, divorced or widowed persons who live separately. It also applies to employees without children or those who live alone.

2. Tax Class II:
   Intended for single parents who live with their child and receive child benefit (Kindergeld) or a child tax allowance (Kinderfreibetrag). No other adult may live in the same household in order to qualify for this class.

3. Tax Class III:
   Applies to widowed persons in the year of their spouse’s death and in the following year. It can also be used by married couples if one spouse is not working or earns significantly less than the other. In such cases, the spouse with the lower income is placed in tax class V.

4. Tax Class IV:
   Applies to married couples and registered civil partners who have a similar level of income. This is the standard tax class for couples.

5. Tax Class V:
   Used when the other spouse is in tax class III. The partner with the lower income – or who does not work – is placed in tax class V.

6. Tax Class VI:
   Applies to people who have more than one job. The main job is assigned to a regular tax class (e.g. I, III or IV), while any secondary employment falls under tax class VI and is taxed at a higher rate.

How does the tax class change?

Your tax class can change when your personal situation changes, for example through marriage, divorce, or changes in your employment situation (such as taking up a second job or giving up self-employment).

Married couples can choose between different tax class combinations to optimise their tax burden. For example, if one partner earns considerably more than the other, it may be advantageous for the higher earner to be in tax class III, while the other partner is placed in tax class V.
A change of tax class can generally be requested once a year, up to 30 November.

Self-employed persons

People who are self-employed are not classified in the above wage tax classes, because they pay income tax (Einkommensteuer) rather than wage tax (Lohnsteuer).
However, if the spouse or partner of a self-employed person is an employee, that spouse will be assigned to one of the regular tax classes.

How to adjust the tax class

To change the tax class, an application can be submitted to the tax office using the relevant form (Antrag auf Steuerklassenwechsel), which is also available online. It is important to submit the application before the end of the year so that the change can be applied in time.

Conclusion

The German tax system is relatively flexible and allows people to adjust their tax class in line with changes in their personal lives. Understanding how this system works can help taxpayers save money and make the best possible use of available tax advantages.

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*The editorial team and authors of our website strive to provide accurate information based on thorough research and multiple sources. Nevertheless, errors may occur or some details may be incomplete or not fully verified. Therefore, the information contained in this article should be regarded as an initial point of reference. For binding and up-to-date information, always contact the competent authorities and professional services.