iCalculator™ DE: Germany Tax Calculators
Welcome to iCalculator™ DE, your comprehensive suite of free tax calculators for Germany. iCalculator™ has provided free tax calculators for Germany since 2016. Since those early days we have extended our resources for Germany to includes Tax Guides, Tax Videos and enhanced the tax calculators and supporting tax information. The Germany Tax Calculator and salary calculators within our Germany tax section are based on the latest tax rates published by the Tax Administration in Germany. In this dedicated Tax Portal for Germany you can access:
Germany Tax Calculator 2023/24
Please provide a rating, it takes seconds and helps us to keep this resource free for all to use
Understanding the German Tax System
If you are new to the German Tax system or simply want to gain a better understanding of taxation in Germany then watch the introductory video to German taxes below. This is the first video from our suite of German Tax Videos which explain the different tax systems and requirements in Germany.
The German tax section of iCalculator™. In this section you can find detailed information about tax and finances in Germany with supporting online calculators. On this page we provide an introduction to the tax system in Germany including Personal Income Tax (PIT) and Corporation Income Tax (CIT). Below is the latest German Income Tax Calculator (2023) which can be used to calculate income tax, social security and church taxes etc. which form part of the typical payroll deductions in Germany. Note: this is for quick salary calculations, for maore advanced features and detailed payroll features use the German Salary and Payroll calculators here.
Taxation in Germany
The Federal Republic of Germany, commonly known as Germany is a European country situated between the Baltic and North Seas. Located in Central - Western Europe, it is the second most populous state of Europe after Russia and the most populous member state of the European Union.
German is the official language of Germany and with official currency as the Euro, Germany has the largest national economy in Europe, which is a highly developed social market economy. Rich in timber, salt, ignite and potash, the economy of Germany is big on service sector as well with almost 70% of GDP coming from the service sector.
Tax Administration Germany
The Federal Central Tax Office abbreviated as BZSt (German: Bundeszentralamt für Steuern) is the tax authority of Germany. It is responsible for various kinds of tax administration and collection of taxes in Germany. With approximately 2,200 employees working currently for BZSt, it was founded on January 1, 2006.
You may find out more About BZSt here.
The BZSt was created under its parent agency The Federal Ministry of Finance. The Website for Ministry of Finance can be accessed by clicking the following link: The Federal Ministry of Finance
Now, let’s take a look at various kinds of taxes that are levied on the individuals in Germany.
German Income tax - Personal Income Tax
The Tax year for Individuals is the same as the calendar year from 1 January to 31 December.
Compliance and filing requirements for individuals
If you are filing a tax return individually, they generally are due by 31st July of next year, following the tax year end. If you are earning any income other than employment income, you will be required to make advance payments on a quarterly basis. These payments will be due in March, June, September, and December. Penalties and fees are applied for late payments and failure to comply.
Germany has source based tax system. This means if you are a resident in Germany, you will be charged on your worldwide income and if you are a non resident you will be charged only on income that is a German source based. You will be allowed to file a joint tax return with your partner if you are married or living together as a civil partner.
Your employment income will be considered taxable if it falls under any of the following income categories: Employment, Business, agriculture and forestry, independent profession, capital investment, rents and royalties, Other personal income.
Personal income tax is levied at progressive rates based on earning thresholds, the tax rates and reviewed annually with the current and historical income tax rates for Germany available here.
Surcharge on personal income tax
A solidarity surcharge is applied on personal income tax in Germany. This surcharge is levied for the improvement of the economic situation in the five new eastern states and is charged at 5.5% for all individual income types. In addition to that, a church tax at the rates of 9% (9% in some cases) is levied on your income if you are a member of officially recognized churches.
Business and professional income
If you are an Individual entrepreneur, you will be taxed under personal income tax. This is applied to net income from professional activities and is paid on a quarterly basis.
Capital gains from the disposal of your immovable assets, and shareholdings are taxed at a flat rate of Array%, you can calculate capital gains tax due in Germany using the German Capital Gains Tax Calculator.
You may be taxed on the net rental income after allowable deductions. Rental income from that is earned from a foreign source are generally exempt if the property is located within the EU / EEA territory.
Your earned income from dividends and interest on the bonds would be subject to a tax at Array% plus a solidarity surcharge. These taxes are generally withheld at the source. Expenses related to investments are not eligible for deduction, however, there is an allowance of € 801.00 and € 1,602.00 per taxpayer (single and joint respectively).
Other taxes and allowances
Real Property Tax
Property tax is charged on the registered value of the property owned by an individual. This is charged at a flat rate of 0.35% by the municipality in Germany.
Gift and Inheritance tax rates vary between 7% to 50% with many exemptions. Inheritance of business properties can be tax free under certain conditions.
Deduction and allowance
You may be provided with personal allowances and for your children, including some other deductions that are subject to restrictions.
This concludes the personal tax section, let’s know about the taxes that are levied on corporations.
German Income Tax - Corporate Income Tax
Compliance for corporations
The tax year is generally the calendar year though you may opt for a different tax year that should not exceed 12 month period. You are required to file your corporate returns generally by July 31st (in case of calendar year as tax year) electronically.
Basis of Tax
Resident companies are subject to CIT on worldwide income and a non-resident companies are subject to CIT only on Germany-source based income.
A flat corporate income tax rate is Array% plus a surtax of 5.5% applies to the resident and non-resident companies on the profits after the deduction of business expenses. You can calculate corporation tax online using the German Corporation Tax Calculator. In addition to this the municipal trade tax is added at the rate ranging between 14% and 17%, municipal trade rates canbe found under the Corporation Tax Calculator and in the German corporation tax rates for 2023.
Let’s have a look at some of the deductions that are allowed for taxable corporate income.
There are many kinds of deductions available for corporate tax calculations given they meet the defined criteria; this includes participation exemption. In addition to this, tax incentive programs are available for SMEs.
Dividends & Interest
Income from dividends and interest are taxed at 26.375%, including surcharge relief of 50% of the with a possibility of tax relief of up to 40% for nonresident companies. Rates may be reduced under a tax treaty.
The withholding tax is paid for the royalties to non-resident companies at 15.825% including surtax.
Other taxes on corporations
Real property tax
This is assessed annually on ownership of immovable property. This levied at the rate of 0.35%. This is applied by municipalities on the value of the property multiplied by a municipal coefficient.
Real estate transfer tax
You will be subject to real estate transfer tax that ranges between 3.5% to 6.5% of your properties based in Germany. It is also applicable to the property-owning companies, on indirect transfers on acquisition of at least 95% of the shares.
Municipal trade tax
This is levied on your income by commercial activities as an entrepreneur that is done through a subsidiary or a nonresident commercial PE (permanent establishment) at a minimum rate of 7%. The rates of Municipal trade tax vary between 14% and 17% of income.
Employers are subject to a mandatory contribution towards social security in Germany up to 50% of wage related social security. Additionally, Employers are required to withhold the wage tax and remit it directly to the tax authorities.
Contributions are towards, nursing and healthcare, pension insurance, and unemployment as per below rates:
- 50% share of Pension insurance at 18.7%.
- 50% of Unemployment insurance: 3%.
- 50% of Health insurance 14.6. In addition to this a health fund may be applied as a supplement (0.90% on average).
- 50% of Invalidity insurance 3.05%. In some cases, a surcharge of 0.25% may apply.
Custom duties are levied on the allowable products that are imported products at rates that range from 0% to 10%. Goods imported from EU countries are generally custom free.