How is the tax calculated?
A significant advantage of using Lohnsteuer kompakt instead of forms is the calculation and optimisation of refunds or additional tax payments. The tax calculation provides an overview of the expected tax assessment based on your data at any time.
In addition, Lohnsteuer kompakt offers further significant advantages compared to the usual presentation of the tax assessment:
- You can view calculation details by clicking on the amount of the expected tax liability. All coloured items can be clicked for further details.
- Clicking on total values takes you to detailed calculation sheets with interim results.
- By clicking on the name of an item, you are taken to the underlying input page.
- Lohnsteuer kompakt always shows the calculation for joint and separate assessment for spouses. This also serves as the basis for the final choice of assessment type.
- Based on your entries, Lohnsteuer kompakt provides valuable tips for tax optimisation and possible input errors.
Note: The final determination of the tax liability and any resulting tax refund or additional payment is made exclusively by the relevant tax office and may differ from the Lohnsteuer kompakt calculation.
How is the tax calculated?
The calculation in Lohnsteuer kompakt differs from my tax assessment notice. How is this possible?
The determination of the tax liability and any resulting tax refund or additional tax payment is made solely by the relevant tax office. If Lohnsteuer kompakt calculates a provisional tax liability, this is a non-binding estimate.
Lohnsteuer kompakt calculates the tax liability based on the data entered, using the applicable income tax laws and the calculation regulations contained therein, with the utmost care. As German tax legislation allows for a wide scope for interpretation, a correct prediction of the official tax assessment can never be entirely accurate in all cases. Therefore, the calculation may differ from the actual tax liability determined by the relevant tax office.
This may be particularly due to the fact that the tax office does not recognise expenses you have entered in our application. Since our programme assumes that the expenses you enter will also be accepted by the tax office, the calculation of the expected tax refund is also based on your entries. The tax office may not have recognised all expenses because necessary evidence was not submitted.
In case of doubt, it may be advisable to appeal against a tax assessment notice. The appeal must clearly state that you are appealing and against which notice. No justification is required.
The calculation in Lohnsteuer kompakt differs from my tax assessment notice. How is this possible?
What is the average tax rate?
The average tax rate indicates the percentage at which the taxable annual income is taxed on average.
To calculate the average tax rate, the tax amount is determined and then divided by the taxable income. The result is the ratio of tax to income.
What is the average tax rate?
What is the marginal tax rate?
The marginal tax rate indicates the percentage of additional income that must be paid in tax, or how a decrease in income provides tax relief. The tax rate for income tax increases as income rises.
According to the income tax table, a taxpayer's personal income is taxed at their personal tax rate. If the taxpayer's income increases, the marginal tax rate reveals the percentage at which the additional income will be taxed.
What is the marginal tax rate?
