The German tax classes

As a single person resident in Germany, you are automatically in tax class 1.
This is another reason why it is advisable to register your place of residence in Germany.

However, because you do not establish a residence in Germany, you are only considered to have limited income tax liability in Germany and end up in tax class 6, the least favorable tax class of all. If you have no other income abroad, you should definitely submit an“Application for treatment as an unlimited income tax payer” in this case.
obligated employee” so that you can get into a better tax class. If you are married, you can use the same form to apply for tax class 3.

As a single parent, you receive tax class 2 if the child lives with you. The tax advantages are manageable.

German tax classes 3 – 5 are intended for married couples. If you are married, both spouses are initially automatically assigned to tax class 4, which offers no advantages over tax class 1.

However, if your partner lives in the EU home country and earns much less than you, you are entitled to apply for the extremely advantageous tax class 3. To do this, you must provide the tax office with documentary evidence of your partner’s earnings and require confirmation from the foreign tax office. The extent to which the partner abroad is subsequently taxed less favorably depends on the national tax legislation.

Of course, this regulation also applies if you live in Germany with your partner. The person who earns more should be in tax class 3, as less income tax is then deducted. The partner then ends up in the unfavorable tax class 5 and as a result more income tax is deducted. However, together they have more in total. If you are both resident in Germany, use the application for tax class change for spouses.

You can see how much income tax you have to pay in this table. This relates to the taxable income. Please note that the taxable income is calculated as gross salary minus social security contributions.

 

How many vacation days are provided for employees in Germany each year?

Minimum vacation

The Federal Leave Act stipulates a minimum leave period of 24 working days, whereby it is assumed that Saturday is a working day. Based on a 5-day week from Monday to Friday, this results in 30 days minimum vacation, which corresponds to 4 weeks.

Of these four weeks, at least two weeks must be taken in a row so that you can regenerate sufficiently.

Young people between the ages of 16 and 18 receive 30 days’ vacation, while severely disabled employees are entitled to 5 additional days’ vacation.

Industry vacation

Various sectors have also negotiated a higher number of vacation days. For example, every employee in the construction industry must be granted 30 days of vacation per year.

Take vacation

Leave must be applied for in accordance with the employer’s specifications with sufficient advance notice and approved by the supervisor. You should therefore not simply stay at home without a signed vacation request because you have made a verbal agreement with someone. Such behavior can have serious consequences if one of your superiors disagrees with the leave.

You are obliged to use up your vacation in the current calendar year. Saving up vacation days for subsequent years should be avoided, as the legislator wants. In principle, vacation days not taken during an ongoing employment may not be paid out. In exceptional cases, vacation may be carried over into the following year if urgent operational requirements make this necessary.

Compensation for vacation days not taken is only possible in exceptional cases if the employment relationship ends abruptly, for example if the employee resigns and is on sick leave until they leave.

Earning opportunities in Germany

Please note that the gross monthly salary is always specified in the employment contract. Social security contributions and taxes are automatically deducted from this salary before you receive the money. So you don’t get “cash in hand” what is in your contract, but about 30-40% less. How many social security contributions are deducted from your gross salary depends on whether you have children and which health insurance fund you are insured with. The wage tax deduction depends on your marital status and the amount of your salary.

In principle, only short-term (maximum 3 months or 70 working days per calendar year) and marginal employment (up to €538 per month) are exempt from social security contributions. Short-term employment is particularly worthwhile for foreign employees who work in seasonal business, for example as harvest workers or in the tourism industry. Wage tax is still due, but there are different ways in which it can be paid. The employer often pays a flat-rate wage tax for such employment.

For normal employment subject to social insurance contributions, a rounded 7.5% is deducted from your gross salary for health insurance, around 2.5% for long-term care insurance, 1.3% for unemployment insurance and almost 10% for pension insurance. Roughly speaking, this adds up to contributions of 21%, not even taking payroll tax into account.

Your employer also pays additional social insurance contributions on top of your gross salary – roughly in the same amount as what is deducted from your salary.

A German employee with a gross salary of €2,500 therefore only receives a net payment of around €1,750 with the most unfavorable taxation, but costs the employer a total of around €3,000. This correlation should be taken into account during salary negotiations.

Within the EU, Germany is the country with the second-highest social security contributions after Belgium. Nevertheless, average earnings in 2022 will still be in the top third of EU countries.

So working in Germany is still worthwhile. In 2024, the average gross salary was €4,323, which corresponds to around €2,750 net. However, salary negotiations should not be based on the German average, as a few employees in management positions earn particularly high salaries and are therefore statistical outliers. More meaningful would be the median, which in 2024 is €3,600 gross and therefore around €2,400 net. For foreign employees with basic specialist knowledge and German language skills at B1 level, net earnings of between €1,800 and €2,300 are realistic. As a general rule, the better your German language skills, the higher your professional qualifications and the longer your professional experience, the higher your salary will be.

The wage floor is definitely the minimum wage, which applies without restriction to all people working in Germany.

The minimum wage

In 2024, the general minimum wage will be €12.41 gross per hour. As a single person without children, this comes to around €1,560 per month, and as a married person in tax class 3 with two children to around €1,710. On January 1, 2025, it will rise to €12.82 per hour.

Irrespective of the general minimum wage, there are numerous industry minimum wages in Germany that are binding for all employers. For example, employees of temporary employment agencies and cleaning staff receive at least €13.50 per hour and unskilled care workers even €15.50 per hour (from 01.05.2024).

The minimum wage may also not be circumvented by a piece rate.

Smart earning models

You can effectively supplement your net salary with social security and tax-free benefits, such as additional expenses for meals. If you go on a business trip and exceed the working time of 8 hours, your employer can pay you an additional meal allowance of €14 per day, or even €28 if you spend the night away from home. With 10 assembly days and one arrival and one departure day, you can easily earn an extra €304 if you manage to eat sparingly on the road. The voluntary inflation bonus, which some companies pay out to their employees in installments, is also exempt from social security contributions and wage tax. A total of € 3,000 can be paid out to an employee as an inflation bonus until the end of 2024. As a result, net earnings can also be topped up with a monthly inflation premium. Furthermore, an employee can be granted monthly benefits in kind in the amount of €50 free of tax and social security contributions, e.g. in the form of a shopping voucher.

So when negotiating your salary, pay particular attention to additional expenses for meals, benefits in kind and bonuses, as these can make a big difference to your net earnings in cases of doubt.

Payroll accounting

When you take up employment, you will receive a confirmation of registration for social insurance from your employer. You will also receive a monthly payslip showing you the social security contributions and wage tax paid in the previous or current month. Above all, check the number of hours worked and your gross salary for plausibility. You must keep your payslips, subsequent annual income tax statements and social security registration confirmation in a safe place.

You can make a trial calculation here.

You can find more information on the tax class here.

The German employment contract – What do I need to consider?

You will usually receive a fully pre-formulated employment contract in which only a few points are negotiable.

As this is therefore a contract that resembles general terms and conditions, numerous restrictions apply to the employer. In particular, the contract cannot unilaterally and unreasonably disadvantage the employee. All clauses that violate German law are invalid and in case of doubt the statutory regulation applies.

The following points are generally negotiable for the employee:

• Salary
• Vacation days
• Regulations on the use of company cars
• Contract term

Make sure that verbal side agreements, such as promises of salary increases or promotions, have no legal relevance. In case of doubt, what counts is what is written in black and white in your contract.

You absolutely need an original signed copy of your employment contract – preferably before your first day of work – which you should keep in a safe place and ideally also digitize so that it cannot be lost.

You often also need to send your employment contract digitally, for example if you want to rent an apartment or apply for a loan.

When you sign the employment contract, you are obliged to comply with all the provisions of the employment contract, the company regulations and existing work instructions. You are expected to comply with data protection regulations and implement all occupational safety measures that you are instructed on. Although limited employee liability applies in Germany, you can certainly be held liable for gross breaches of duty and gross negligence.

Therefore, ask whether you can be provided with translated or digital versions of company regulations and instructions so that you can familiarize yourself with them at your leisure. Under no circumstances should you get the idea: “It’s all in German anyway. I don’t understand, I’ll save myself the trouble.”

Health and safety instructions in particular serve above all to protect your health and should therefore not be ignored lightly.

 

Registering your place of residence in Germany

To take up employment in Germany, it is advisable to register officially with the municipality or city in which you have found permanent accommodation.

Nevertheless, EU citizens are generally not obliged to establish residence in Germany if they will only be working in Germany for a few months or if they regularly travel to their home country for longer periods. You only have to register in Germany if you are staying in the same place in Germany for longer than three months at a time.

The legal basis for this is Section 27 (2) of the Federal Registration Act: “For persons who otherwise live abroad and are not registered in Germany in accordance with Section 17 (1), this obligation [zur Anmeldung] applies after three months.”

This also applies if you have been staying in the same accommodation for longer than three months, regulated in §29 of the BMG.

However, if you are always working in different places in Germany with constantly changing accommodation or as a long-distance driver (e.g. for assembly work), it is also advisable for practical reasons not to register a place of residence, as you are always at different addresses and therefore cannot provide a summonable address. In this case, you are not required to register and enter your address in your home country everywhere. However, you must then ensure that incoming mail is regularly processed at your home address.

Nevertheless, registration simplifies numerous processes. When you register with the municipal or city administration responsible for you, the tax identification number will be sent to you automatically. If you are not resident in Germany, you must apply for a tax identification number manually at the Federal Central Tax Office. Since mailing abroad often goes wrong, the future employer should be entered as the authorized recipient, otherwise you may have to wait a very long time for this important number.

You will need German health insurance in any case. Some health insurance companies also have difficulties with foreign residential addresses.

In addition, you can only open a German bank account if you have a German registration address. This proves to be helpful for the future employer, who can thus dispense with a foreign bank transfer, which may be more time-consuming or costly. In this way, you yourself prevent possible losses from currency fluctuations if your home country does not have the euro.

How does the residence registration work?

You must have a confirmation of residence from your landlord to register your place of residence. You can obtain these from the landlord of your accommodation. Your landlord is legally obliged to cooperate and will therefore usually comply with your request to issue a landlord’s confirmation of residence without delay. The following data must be shown on the landlord’s confirmation of residence:

• Move-in day
• Address of the landlord
• Address of the apartment
• Your name (with date of birth if applicable)
• Signature of the landlord

You can send this template to your landlord pre-filled.

As soon as you have the landlord’s confirmation of residence, make an appointment with the municipal or city administration where your accommodation is located. The best way to do this is to make an appointment online. Some municipalities allow an audition without an appointment, but this varies greatly from municipality to municipality, which is why a specific appointment is always preferable to “showing up at random”.

Now present your landlord’s confirmation of residence and your identity card or passport to the municipal or city administration.

You must also inform the processor whether you are registering in Germany for the first time or whether you have already registered in Germany before. Your religious affiliation may also be requested for statistical purposes.

You will then receive the registration confirmation, which is best copied several times and kept very carefully!

After registering, make sure that your name is on the letterbox. You are legally obliged to do so.

Advantages and disadvantages of registering your place of residence in Germany if you are not required to register

Advantages

• It is possible to open a German bank account
• Satisfied health insurer
• satisfied doctors
• satisfied employer
• Automatic sending of the tax identification number
• unlimited tax liability is automatically assumed
  (only an advantage for full-time employment in Germany)

Disadvantages

• You will probably have to pay a broadcasting fee of €55.08 per quarter.
• After one year at the latest, you must register your car in Germany and pay the German motor vehicle tax.

So even if there is the threat of paying the annoying broadcasting fee and later the motor vehicle tax, the advantages of registering your residence outweigh the disadvantages.

 

 

In Deutschland arbeiten – Erforderliche Dokumente für EU-Bürger:innen

Wenn Sie aus einem EU-Staat, bzw. einem EWR-Staat stammen, benötigen Sie in Deutschland keine Arbeitserlaubnis, das heißt Sie dürfen ohne Einschränkungen eine Beschäftigung aufnehmen.

Es ist also KEIN Antrag auf Aufenthaltsgenehmigung bzw. auf Arbeitserlaubnis bei dem für Sie zuständigen Landratsamt bzw. Regierungspräsidium erforderlich.
Sie benötigen KEIN Visum für die Einreise und können sich unbegrenzt in Deutschland aufhalten.

Bei Ihrem künftigen, deutschen Arbeitgeber legen Sie deshalb einfach nur Ihren Reisepass oder Ihren Personalausweis aus Ihrem Heimatland vor.

Aber Achtung: Wenn Sie nur einen Aufenthaltstitel in einem EU-Staat besitzen, gelten möglicherweise andere Regelungen. Prüfen Sie hierzu unseren Blogartikel “Arbeiten für Drittstaatenangehörige mit Aufenthaltstitel in einem EU-Land.”

Weiterhin wird der Arbeitgeber für die Lohnabrechnung umgehend eine Mitgliedsbescheinigung einer deutschen Krankenkasse, sowie Ihre Steueridentifikationsnummer anfordern.

Die Steueridentifikationsnummer erhalten Sie automatisch per Post, wenn Sie in Deutschland einen Wohnsitz anmelden.

Die deutsche Krankenkasse müssen Sie selbstständig beantragen. Dabei haben Sie freie Auswahl. Recherchieren Sie im Internet, welche Krankenkasse die besten Leistungen bietet. Füllen Sie das Antragsformular sorgfältig aus.

Achten Sie auf die Bearbeitungsdauer. Es sollten noch mindestens drei Wochen Zeit sein, bevor der Arbeitsvertrag beginnt, damit zu Beginn Ihres Vertrags alle wichtigen Dokumente bereits vorliegen. Das ist sehr wichtig, da einige Arbeitgeber per Gesetz verpflichtet sind, Sie bereits am ersten Tag der Beschäftigungsaufnahme bei der Sozialversicherung anzumelden. Die Sofortmeldepflicht betrifft zum Beispiel das Baugewerbe.

Erledigen Sie die Schritte in folgender Reihenfolge:

1. Bitten Sie den künftigen Arbeitgeber um ein schriftliches Arbeitsplatzangebot mit Vertragsbeginn in zwei bis drei Wochen.
   –> Erfahren Sie hier, worauf Sie in Ihrem Arbeitsvertrag achten müssen.
2. Begründen Sie einen Wohnsitz in Deutschland, indem Sie sich in der Gemeinde Ihrer Unterkunft anmelden.
   –> Erfahren Sie hier, wie Sie sich in Deutschland anmelden und welche Dokumente Sie dazu benötigen.
3. Wählen Sie eine Krankenkasse aus und beantragen Sie die Mitgliedschaft.
   –> Erfahren Sie hier mehr über das deutsche Sozialversicherungssystem.
4. Reichen Sie bei Ihrem Arbeitgeber Ihre Steueridentifikationsnummer ein. Diese wird Ihnen automatisch innerhalb von circa zwei bis drei Wochen vom Bundeszentralamt für Steuern per Post zugestellt, wenn Sie einen Wohnsitz in Deutschland angemeldet haben.
   –> Erfahren Sie hier alles zur Steueridentifikationsnummer.
5. Reichen Sie bei Ihrem Arbeitgeber Ihre Sozialversicherungsnummer ein. Diese wird Ihnen automatisch innerhalb von circa vier bis fünf Wochen von Ihrer der deutschen Rentenversicherung mitgeteilt. 
   –> Erfahren Sie hier alles zur Sozialversicherungsnummer.
6. Reichen Sie dem Arbeitgeber außerdem die Geburtsurkunden Ihrer Kinder ein, damit diese bei der Lohnabrechnung berücksichtigt werden.
   –> Erfahren Sie hier die Einzelheiten zu Gehalt und Lohnabrechnung.

Wenn Sie Kinder haben, zahlen Sie einen geringeren Beitrag in die deutsche Pflegeversicherung ein. Wenn Ihre Kinder bei Ihnen in Deutschland leben, können Sie außerdem Kindergeld beantragen. Auch wenn die Kinder im Ausland leben, gibt es Möglichkeiten, Zuschüsse der Familienkasse zu bekommen. Prüfen Sie hierzu unseren Artikel “Kindergeld und Kinderfreibetrag.”