Taxes in Germany — Basics for Foreigners

As of: March 2026. All information without warranty.

The German tax system — quick overview

In Germany, you pay Einkommensteuer (income tax) on your earnings. The system is progressive: the more you earn, the higher your tax rate.

Grundfreibetrag 2026

The first €12,348 per year is tax-free — this is the subsistence minimum. You only pay taxes starting from €12,349.

Steuerprogression 2026

| Taxable Income | Tax Rate |
|---------------------------|------------||
| Up to €12,348 | 0 % (tax-free) |
| €12,349 – €17,799 | 14 – 24 % |
| €17,800 – €69,878 | 24 – 42 % |
| €69,879 – €277,825 | 42 % (top tax rate) |
| From €277,826 | 45 % (wealth tax) |

Important: The tax rate applies only to the respective income bracket — not to your entire income!

Steuerklassen (Tax Classes)

Additional salary deductions

Besides income tax, the following are deducted:
- Solidaritätszuschlag: 5.5% of income tax (only for higher incomes, threshold 2026: €19,950)
- Kirchensteuer: 8–9% of income tax (only for church members)
- Social insurance: approx. 20% (health, pension, long-term care, unemployment)

Your first Steuererklärung

Why bother?

On average, employees get back €1,095! Common deductions:
- Commute costs (flat rate: €0.30/km, from 21st km: €0.38/km)
- Work equipment (laptop, office chair, software)
- Professional training costs
- Moving costs (work-related)
- Craftwork services and household services

How to do it?

• ELSTER (elster.de) — free online portal of the tax office
• Tax apps: Wiso Steuer, Taxfix, Smartsteuer (from ~€30)
• Tax advisor: from approx. €300–500 (worthwhile for complex situations)

Deadlines

• July 31 of the following year (e.g. for 2025: by July 31, 2026)
• With tax advisor: extended until end of February of the next year