All of your German tax questions answered, including:
- How much tax will I pay in Germany?
- Can I claim a German tax refund?
- How do I file my tax return?
- How do I reclaim my German pension contributions?
Let’s face it. Nobody likes tax! But there is no escaping the topic, even if you move all the way to Germany.
That’s why we’ve partnered with German tax experts Taxback to answer some of the most common questions overseas workers have about their tax responsibilities and entitlements.
Let’s get started!
How much tax will I pay in Germany?
Germany has progressive income tax rates. That means the more you earn, the more tax you will pay.
Tax rates start at 14% and rise to 45% for the highest earners.
Can I claim any tax credits?
The first €10,908 (2023) of your earnings are tax free! This is known as the tax-free allowance.
You start to pay tax when you earn more than this amount
What is my German tax residency status?
If you spend more than 183 days of the year in Germany, you will generally be considered a German resident for tax purposes.
That means you must pay German income tax and report your worldwide income.
What are tax refunds?
The majority of workers in Germany pay too much income tax during the year and are entitled to a tax refund.
In fact, the average German tax refund is €1,020 so it makes sense to check how much you can claim.
In order to get your tax refund, you must first file a tax return.
As we discuss later in this guide, exactly how much you can claim back will depend on your personal circumstances.
Do I have to file a tax return?
Most workers in Germany are technically not required to file a tax return.
However, in order to receive your tax refund, you will need to file a tax return at the end of the year.
Filing a return is not too challenging, especially when you have the support of a tax agent like Taxback. So why leave your tax refund behind? After all, this is your hard-earned money.
Who can claim a tax refund in Germany? Can overseas workers claim any tax entitlements?
Most people with earnings in Germany can claim back a portion of the income tax they paid throughout the year.
So, if you have worked in Germany, it’s a good idea to check if you are entitled to a German tax refund.
There are a variety of scenarios that may result in you receiving a German tax refund.
In short, you will be due a German tax refund if…
- Your annual income was under the tax-free allowance
- You worked part-time or had a temporary job in Germany
- You were not correctly classified for tax payments
- You financially supported your parents or other dependents in your home country
- You paid rent in both Germany and your home country
- You paid for flights to and from Germany
- You incurred work-related expenses such as travel costs
- You paid pension insurance
- You are married, but were taxed as single
- You had work-related expenses that were not covered by your employer
What do I need when filing my tax return?
When you sit down to file your tax return, you’ll need to have a couple of important documents close by. These include:
Lohnsteuerbescheinigung
This is your official annual income statement, which you will receive from your employer at the end of the tax year.
Identifikationsnummer
This 11 digit unique identification number is your personal tax ID number and will be given to you when you register an address in Germany.
Steuernummer
If you have filed your German tax return in previous years, you can find your Steuernummer on your Assessment order (Steuerbescheid) from the Finanzamt (local tax office).
How do I claim my German tax refund?
In order to claim your tax refund, you must first file a German tax return.
It’s free to file your tax return directly with the German tax authorities yourself.
However, it is important to keep in mind that, if you file yourself, it will be up to you alone to ensure you receive your maximum refund while remaining compliant with the German tax authorities.
The main advantage of working with a tax agent (like Taxback) is that you will receive your maximum legal refund and avoid all the boring tax paperwork.
When should I file my tax return?
The good news is – if you’re an employee – you can file your return at any time during the year.
In fact, if you have never filed before, you can go back four years when filing.
In other words, the deadline to file your 2023 tax return is 31 December 2027.
But why wait around to collect your tax refund? You can start your refund here.
I don’t intend to work in Germany forever! Can I claim back my pension contributions when I leave the country?
If you are a resident of a non-European Union country – you can potentially claim a refund of your German pension contributions when you leave Germany.
In Germany, workers must contribute 9.35% of their salary to a pension fund (Rentenversicherung).
In order to be eligible for a refund, you must have left Germany at least two years previously.
In addition to your tax refund, the Taxback team can also help you to reclaim your pension contributions.
In fact, the average worker receives €5,410. So it makes a lot of sense to check what you’re owed. And even if it’s been a while since you left Germany, it’s still worth applying – you can go back as far as 1994.
Who can claim a German pension refund?
You can claim a German pension refund if…
- You are a resident of a non-EU country (excluding Israel, Turkey and former Yugoslavian states).
- You have paid contributions into your German Pension Fund for less than 5 years (60 months).
- You have been working after 1994 in Germany to claim your tax back.
Why apply with Taxback?
The Taxback team makes the process of claiming a German tax refund super easy!
In fact, once you register here, their tax experts will take it from there!
They will manage all of the paperwork for you, ensure you are claiming every tax relief you’re owed, and transfer your maximum refund straight to your bank account anywhere in the world.
- Maximum refund guaranteed – the average German tax refund is €1,020
- Simple online process – no complicated forms
- Peace of mind – 100% compliance with German tax authorities
- Convenient service – your refund paid into any bank account in the world
- 24/7 Live Chat tax support to answer any tax questions you have