Which tax class applies to whom?

The tax class determines the amount of monthly income tax and is a crucial factor for your financial planning. In Germany, there are six tax classes, which apply depending on your personal life situation.

Tax Class I: For Single and Divorced Individuals

• Applies to single, divorced, or permanently separated employees.
• Married employees whose spouse lives abroad.
• Widowed employees if the spouse died before 1 January 2014.
• Employees with limited tax liability in Germany.

Tax Class II: For Single Parents with Relief Amount

• Applies to single parents who are single and run a household where at least one child lives.
• Entitlement to child benefit or a child allowance for the child.
• The child is registered with the employee's main or secondary residence.

Restrictions:

• Tax Class II is void if the single parent lives in a cohabiting relationship or another adult contributes financially or practically to the household.
• Must be applied for at the tax office, e.g. with the official form "Declaration for the relief amount for single parents".

Tax Class III: For Couples with a Main Earner

• Applies on request for married or partnered employees if both partners live in Germany and are not separated.
• Couples where one partner does not receive a salary or is classified in Tax Class V.

Special Regulation for Widowed Individuals:

• In the year following the death of the spouse, the widowed employee belongs to Tax Class III if the partner died after 31 December 2013 and both partners lived together on the day of death.

Tax Class IV: For Couples with Similar Income

• Applies to couples or partners who both receive a salary, live in Germany, and are not separated.
• Standard since 2018: Tax class combination IV/IV.

Option: The factor method can also be chosen to individually split the tax burden.

Tax Class V: Supplement to Tax Class III

• One partner chooses Tax Class III, the other is automatically classified in Tax Class V.
• Useful for large income differences between partners.
• Obligation to File a Tax Return: With the combination III/V, an annual income tax return is required.

Tax Class VI: For Employees with Multiple Jobs

• Applies to employees who receive a salary from multiple employers.
• The salary from the second and further employment is taxed according to Tax Class VI.
• It is advisable to use Tax Class VI for the job with the lower income.

 

Conclusion: Choosing the right tax class is crucial to optimise the monthly tax burden. While Tax Classes I to II apply to single individuals, couples can choose between different combinations depending on their income situation. Tax programmes such as Lohnsteuer kompakt or advice from the tax office can help to opt