Taxes are one of the major deductions from your salary; especially if you are in the higher tax paying category. However, you can still make an impact in your monthly drawn salary by moving to a lesser tax paying class.
Most things about taxes in Germany are a hot topic and not very easy when it comes to managing taxes on your own. However, not every topic needs to be very hard. It is rather easy to change your tax classes in Germany and we’ll walk you through the process.
Tax classes in Germany
In Germany, your tax class will not affect your tax amount, but rather, depending on your income, the amount you pay will vary. Taxes are, however, calculated based on the amount of income you earn each month. Remember that, your overall tax bill remains the same over the course of the year.
Singles are taxed in tax class I. This includes widows, divorcees, and civil partners. A married person who is not in class II, III, or IV can also be in class I. Unmarried expats in Germany or those whose spouse lives in a different country will automatically be assigned to tax class 1 upon arrival.
Single parents living separately are taxed under tax class II.
Those who are married and whose spouses are classified under tax class V or who have recently died are in tax class III.
Tax class IV will be assigned to both spouses. A couple earning nearly the same amount should fit into tax class IV. You will automatically be assigned class IV if you arrive in Germany with your spouse or if you marry in Germany.
If you are married to someone who has tax class III, you fall under tax class V. Those earning multiple wages from multiple employers are considered to be in tax class VI..
How do I know my tax class?
On your payslip, you can find your tax class in the left upper corner, marked SKI. The tax class numbers range from 1 to 6, or from I to VI in Roman numerals.
What is the process for obtaining a tax class?
Your tax ID and tax class will be assigned to you by the Finanzamt (tax office) after you are registered in Germany. While the tax ID will be valid during your stay in Germany, the tax class depends on your marital status.
What are the steps to change your tax class in Germany?
German tax classes can be changed quickly and easily.
Fill out the form for changing your tax class
You will need to submit the Antrag auf Steuerklassenwechsel bei Ehengatten if you want to change to the tax class combination III/V. It is possible to do this online or to print out the form from the website of the Finanzamt and fill it out. Unfortunately, the form does not come in English. Alternatively, you can use Google translate’s document translate option to translate the form to English or to a language you understand. However, make sure you submit only the German form to Finanzamt.
When to change my tax class in Germany?
It is easy to change your tax class in Germany. Most expats become concerned about tax class when they marry or move to Germany alone if they are married. Separation, divorce, the birth of a child with full custody or a change in employment or income can also result in a change in tax class. It will usually be the spouse who files the request alone who signs the form in these cases. In the event that one spouse passes away, the tax class of the other spouse will be changed automatically. Even during a single year, tax classes can be changed a number of times depending on the circumstances.
Frequently Asked Questions - How to Change Tax Classes in Germany
Is there a specific form for changing tax classes in Germany?
Yes, there is a specific form known as the Antrag auf Steuerklassenwechsel bei Ehegatten for married couples and the Antrag auf Steuerklassenwechsel bei Ehegatten/Lebenspartnern for registered same-sex partners. You can obtain these forms from your local tax office or download them online.
Can I change my tax class multiple times in a year?
In most cases, you can change your tax class only once during a calendar year. However, some exceptions exist, such as in the case of a divorce or death of a spouse.
When does the new tax class take effect?
The new tax class typically takes effect at the beginning of the month following your application. For example, if you apply in April, the change will be effective from May 1st.
How can I check my new tax class after the change?
You can find your updated tax class on your payslip or income tax statement. Your employer will automatically adjust the withholding tax based on your new tax class.
Will changing my tax class affect my overall tax liability for the year?
Changing your tax class can affect your monthly net income, but your total annual tax liability remains the same. It may result in receiving a tax refund or paying less tax at the end of the year when you file your income tax return.
Can I change my tax class without any reason?
Changing your tax class without a major life event is generally not possible. In general, the tax classes in Germany are primarily based on marital status and the number of children, so you'll need to experience one of these changes to request a tax class change.
Are there any fees for changing tax classes in Germany?
Generally, there are no fees for changing your tax class in Germany. However, it's advisable to check with your local tax office for the most up-to-date information and to ensure you're meeting all the requirements.