Each month, the company will automatically deduct the appropriate amount of income tax from your gross salary in the form of a wage tax and transfer it to the relevant fiscal authorities. Your employer will also take care of passing on your solidarity tax contribution and church taxes (if you belong to a religious community for which such taxes are levied). Finally, your insurance contributions for retirement, health services, long-term care, and unemployment will also be deducted from your salary and transferred to the relevant fiscal office. To find out how much money your employer is transferring to you (in other words, what your take-home pay is), you can consult the payroll statement you receive each month.
Income taxes in Germany
The income tax rate that serves as the basis of the official wage tax tables (which also factor in the tax exemptions and flat allowances relevant for employees) represents the core of Germany's income tax laws. In principle, it is the rate according to which the amount of tax to be paid by each citizen is established.
At a glance
- Income tax is to be paid on all of the money you earn in each calendar year.
- If you are an employee, your employer will handle your income tax payments (in the form of a wage tax) each month.
- If you are self-employed, you are required to file an income tax declaration.
- Along with the aforementioned payroll tax, your employer will pay your solidarity tax and insurance contributions for retirement, health services, long-term care, and unemployment (and church taxes, if applicable) after deducting them from your gross salary. You will then receive the remaining amount (read: your net salary).
Tax identification and electronic wage tax cards (ELStAM)
Every registered citizen in Germany receives an 11-digit tax identification number. This number is required for all matters pertaining to taxes and the fiscal authorities. Those who have just arrived from a foreign country and have registered as citizens will automatically receive their tax ID numbers within three months. These numbers are assigned for life and do not change, even if you get married or move to a different location in Germany.
The previous paper-based system was replaced by an electronic procedure in 2013, which also involved moving from paper wage tax cards to a digital version. In the new ELStAM system, the information previously found on the card's front side (tax bracket, number of children, exemptions, church tax characteristics) is stored in a database kept by the fiscal authorities, where it is electronically accessible for your employer. Since 2011, Germany's fiscal offices have been the only authorities you need to consult about changing tax brackets or other aspects of the amounts deducted from your salary.
Income tax declarations
At the end of a calendar year, you can ask the government to check whether you have paid too much income tax. To do so, you must submit your income tax declaration to the relevant fiscal office. On the basis of the figures you supply about your actual income and exemptible expenses , the government can check whether you are entitled to a refund. The Federal Statistical Office reports that nine out of 10 taxpayers in Germany are, so filing the form is often worthwhile. On average, people receive a refund of around €900.
Dog license fees
If you own a dog, you are required to register it and pay a corresponding fee. You can typically register in person or by writing to the authorities responsible. A form is available for this purpose. In principle, you are required to register your dog within one month of the day on which you:
- First acquired the dog, or
- First moved to your current community
If you move to another community, you will need to deregister your dog in your previous place of residence and reregister with the authorities in your new community. Corresponding guides can provide further information on these procedures.
If you move to a different location within the same community, you only need to inform the local authorities of your new address. You can do so in person, in writing, or over the phone by providing your name and the transaction number on your dog license fee statement.
Cost: Each community establishes its dog license fees based on related local statutes, which means that they vary from place to place.
These fees can increase significantly with each additional dog beyond the first, or for particular breeds.
Required documents: When registering in person: current form of personal identification or registration confirmationIn some cases: documentation of the dog's breed (to determine the fee to be paid).