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 axes 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. 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.
1. 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.
2. Send the form to the tax office (Finanzamt)
The tax office will inform your employer of the changes within five days of the next month if you send the form in before the end of the month.
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.