It's a pity this in completely untrue !

Wow - thank you for your kind words! 🤩

Thanks for your suggestion!

As we mention in the video, wage tax is part of the deductions. The rest are social contributions. VAT varies from country to country. Germany is in the middle compared to other EU countries. It’s always a matter of what you’re comparing it to.

Exactly… I also get taken exactly 43%, it is a theft. Just paying over 900€ montly for basic health insurance is outrageous

​@@Micha-bp5om Come to Florida, beats Germany in every sense.

@@cineffect I would love to but I am afraid to move alone :( already did the step to move to Germany and now kinda find it comfortable, despite the huge taxes.

Thank you! 😊

I second that

Yes ,ladies are funny

Hey 👋 I'm coming to Germany for my Masters, is it really worth it, and can I save money in Germany

@@user-tr8nu8cy6p save money??? haha you must be delusional to think that lmao

@@user-tr8nu8cy6p same here

Thank you so much! 😊

@@simplegermany Welcome!!! and thank you very much for uploading such a valuable content!

And what do people in other countries pay extra? US for example

That must be marginal tax again. According to dastatis the average (not median) income in 2022 has been 4105€. Using the Salary Calculator from arbeitnow, the netto comes out to 2.635,31€ Giving a total tax (inclusiv health-, pension-, care-, and Unemployment Insurance which are technically not taxes) of 35,8% not 47,8%. And taxes did not increase much from 2022 to 2023, if even at all.

@@arnodobler1096 I can tell you that in the US the progressive rate is only 22% all the way up to earning over $90k compared to Germany at 42%.

I assume they added mandatory health insurance and social security into it?

@@garrett7101add the state income tax, in many states

Hahaha Can totally relate. 😅 A Masterpiece!!

Yeah, solidarity is a bummer. Others should just f@ck the hell off.

I don't understand why they didn't abolished "solidarity surcharge" aka extra tax entirely. It's truly a bummer to have always calculate it into high incomes and capital gains. They simply should make it 43% flat.

Thanks for your support!

It depends. Net of course is important, but what needs to be taken into account is what you need to use that net for. Do you still need to pay health insurance from it, do you need to build a cushion in case of unemployment, do you still need to pay for schooling for your kids, etc. The system in Germany is definitely not for everyone. Our goal is to educate and help those that want to move or are in Germany to understand how things work and feel empowered.

@@simplegermany The perfect reply to every other pal at table conversations about my moving. 😉 Thank you! That is right and need only be understood once and for all.

We have a written guide for that 😊 www.simplegermany.com/german-pension-refund/

Thanks a lot Fanny! Happy to hear that our explanations are as clear as we intended them to be and that the effort pays off! 😊

Also that was more math than I expected to encounter today but also very glad that I now know it! It's good to be informed and Yvonne makes the hard stuff easy to digest and Jen reiterating it so that my 5 year old brain can process it also helps 😅

what did you learn today? Are you now gonna pay less taxes?

I agree with you, the video was confusing and misleading as atlast 42 percent is still deducted if you make 85000 because of health and pension and social contribution.

Exactly, 43% of my brutto salary is deducted! I only see 57% in my bank account. 😡 and I earn 100k, I get under 5000€ monthly😢

We already have a video on the topic and suggest for you to watch it at the end of the video. Here it is again: studio.kzfaq.infoqRiV8IEx14U/edit

@@simplegermany you guys are the best 👌

It all depends on your perspective. We will release another video on that topic in the near future. Not all social contributions go up endlessly, as there is a earning ceiling between 60-88K, so it doesn't blow out of proportion 😉

thanks, would love to see a video on this 🙂

In understanding taxes, it's also good to compare the cost of living between your home and your new home. In some cases, the taxes will be higher, but you may end up saving money on other expenses in return like healthcare, transportation, groceries, etc.

True. With a low income you pay high social fees, with a high income you pay high taxes. Above 67k you can choose private health insurance, wich in cheaper in many cases and better treatment. And regarding taxes you can invest in a tax-deductible pension plan to lower your tax burden. Have made videos on both on my channel.

@@simplegermany also, I would really love to see a video on how Germany is doing compared to it's other neighbouring countries in Europe

We have some content regarding starting a buisness in Germany under Self Employed on our website (www.simplegermany.com/working-in-germany). Are there any particular questions you have regarding the topic that we have not covered?

Thanks a lot! 😊

We just published a guide on pensions last week: www.simplegermany.com/pension-in-germany/ We announced it in our weekly newsletter. If you'd like to receive such updates in the future, you can sign up to our newsletter here: www.simplegermany.com/newsletter/

The trouble about working self employed is that for quite a while (mostly), you weite your invoices and the billed amount plus Umsatzsteuer comes in. Then, after your first Umsatzsteuer- and income tax declarations are due and processed, you're asked to pay income tax for the past year AND make a deposit for income tax for the current year. This really hits those who treat all the cash like theirs to spend... Even if the freelance income is much higher than the last salary, any new freelancer should should restrain his expenses and put most money aside for that very special tax moment...

Yes, this is more accurate. I also hate the high taxes. On the other hand that means, everything you are able to deduct you get 42% back from the government. I personally and many of my clients invest in a tax-deductible pension plan to lower my taxable income und invest for retirement at the same time. Also I’m in the private health insurance, where I get faster and better treatment and on top the contributions are way lower. Have made a video on both on my channel.

@@DavidReinhardInVertas maybe you can clear this up for me then. I thought pension contributions were 100% deductible, but on the tool that I use for my tax returns, adding e.g. €100 of pension contributions only lowers my taxable income (zu versteuernde Einkommen) by €88. Is it right that only 88% of pension contributions are tax deductible? I haven't found the proper information on the German govt website about this, so at this point I'm not sure.

That is in fact the case… when you are getting your 401k or military pension distributions, they will be taxed like this; your own contributions are tax free, but capital gains will be taxed.

We have a written guide on that 😊 www.simplegermany.com/savings-account-germany/

Thanks so much for your great feedback! 😊 From our experience, it will probably be tax class 1, as family members only 'count' when they also reside in Germany. We talk more about in our guide and also explain how to change tax class once your family is here: www.simplegermany.com/tax-class-germany/ - a good topic for another video as well 😊

@@simplegermany : Perfect. I understand your point. Thank you very much 😊

@@simplegermany : Also, am very excited to move to Germany ( Stuttgart ) from India for my employment in Automotive domain in last week of this month. Each and every videos of yours has helped me from taking interview to making rental agreement with German land owner for apartment 😊. I would like to share my experience with you guys on a platform and also it might be helpful to others. So, could you please let me if I can share my experience? If yes , I would like to know where and how😀

That's awesome! We hope your move will go smoothly 😊 We would love to hear more about your story if you don't mind sharing. We are particularly interested in: - What brings you to Germany? - How did you discover Simple Germany? - Which videos or guides have been the most helpful to you? You can send us a message via our contact form: www.simplegermany.com/contact/

@@simplegermany : Awesome. I just shared my experience for your queries. Once again thanks a lot☺️

Yes and we already did a video about it 😊 kzfaq.info/get/bejne/aJ6Ke6uF2amthmQ.html

Any income up until the basic allowance is tax free.

Thanks for your suggestion! A video about that is coming soon ☺️

actually, someone making 100k costs the company already roughly 120k because of taxes and social contributions the employer has to pay. if you also calculate the mwst (vat) and all the million other taxes in germany such as Soli, EEG and so on and so on, as an average guy you pay 39.5% (excluding the business site afaik). if you make more than the average, it gets quickly higher. if you are high income and you lose your job, you want to raise children or whatsoever, you are pretty much screwed with barely any help by the gov. social contributions are basically only for the low income and useless for the others even though the others are contributing heavily to the system the others are taking advantage of. the missing support by the gov and society if you fall as a high tax income person is the reason high income people leave. at least as far as i am aware from my surroundings and myself.

yes i completely agree. Germany is for average people. I try to work hard and I am not far from 100k, but I do not see a reason staying another let's say 5-10 more years. what I get for working hard? nothing - Germany basically taking so much and where are all taxes going 😂 no motivation to get even higher salary here because half of it is gone. then germany is wondering why talented people are not coming

You're exactly right! Germany is crying for people to move in yet 1.2 million Germans left last year mostly for the US and Switzerland and this is exactly why. Economic opportunity.

In 2020, the top income tax rate in Germany was 45 percent. This tax rate applied to single persons with taxable income of €270,501 or more per year, and to married persons assessed jointly with taxable income of €541,002 or more per year. It is important to note that this is the federal tax, and there may be additional church taxes and other levies on the income if applicable. It should be noted that taxable income in Germany is calculated after deducting certain lump sums and deductible expenses. These include, among others, income-related expenses, special expenses and extraordinary burdens. However, contributions to statutory health insurance and long-term care insurance made by employees are NOT deducted from taxable income. Although these contributions reduce the employee's gross income, they are generally not taken into account to reduce taxes! The minimum health insurance amount would then be about 56,250 euros (contribution assessment ceiling) * 14.6 percent = 8,197.50 euros per year. With a gross annual income of 270,501 euros and assuming a single household in Germany, the deductions could roughly be as follows: 1. income tax: the top tax rate is 45 percent for the portion of income above 270,500 euros. Let us assume that the entire income is taxed at this rate. 270,501 Euro * 0.45 = 121,725.45 Euro income tax 2. health insurance: health insurance contributions may vary depending on the health insurance company and individual situation. Let's assume that it is an average rate of 15 percent of gross income. 270.501 Euro * 0,15 = 40.575,15 Euro Health insurance 3. pension insurance: contributions to pension insurance are usually about 18.6 percent of gross income. 270.501 Euro * 0,186 = 50.398,686 Euro pension insurance 4. solidarity surcharge: in Germany, this currently amounts to 5.5 percent of income tax. 121,725.45 Euro * 0.055 = 6,694.00 Euro solidarity surcharge 5. church tax: depending on the federal state, this amounts to between 8 percent and 9 percent. 270,501 Euro * 0.09 = 24,345.09 Euro church tax The sum of all basic taxes is 243,738.55 Euro. This leaves 26,762.45 euros per year or 2,230.20 euros per month. The monthly net is therefore 2.230,20 Euro.

You can use the salary calculator linked in the description.

@@simplegermany There is no "how" anywhere. Just results. for 3.000 euro gross income the annual taxes 6.534,05. That is my basic calculation, im missing some deductions, My coaculations and the results are not same, can you please let me now what i didnt deduct. 10.908 0 10.909-15.999 (979,18 · y + 1 400) · y 16.000-62.809 (192,59 · z + 2 397) · z + 966,53 62.810-277.825 0,42 x - 9.972,98 277.826 555.650 0,45x - 18.307,73 3.000*12=36.000 36.000-15999=20.001 20.001/10.000=2,0001 (192,59*2,0001+2.397)*2,001+966,53 = 6.534,05 (annualy taxes)

Steuerklasse 1

Thanks for sharing! All the best for your plans to move 😊

it is same in turkey too. corrupted governments :(

This is a very good point: what do you get for your (tax/contributions) money??? But the thing is… I mean, sure compared to the described Romanian conditions Germany is still much better. But when you compare it to Nordic/Scandinavian countries again, then Germany doesn't look so good anymore. I would take a closer look especially at education, health and also the general infrastructure, in many areas it's really a bad joke what Germany does with all the tax money.

We'd say it's very similar to any other tax returns. You can check out our video (kzfaq.info/get/bejne/p7iZiZt6qt6VZIk.htmlsi=U-p3tE2a3hgU_ep-) and guide (www.simplegermany.com/tax-declaration-germany/)

@@simplegermany thank you so much ❤️

If you payslip changes every month, you would need to add them all up at the end of the year to get to your yearly tax rate. But to get a feeling right now, you can calculate the tax rate from your last 3 payslips to get an idea of where you stand.

@@simplegermany how is the monthly income taxed?

It is about the same amount over here in Germany. Die AUD converts by a rate of just 0,59.

18,200.00 AUD = 10,847.49 EUR Steuerfreibetrag DE 10,908.00€ You pay more at the moment 😉.

If you qualify as a freelancer you do no pay any 'Gewerbesteuer' regardless of how much you earn, but you will always pay income tax, as described in the video.

Well, I think that is a hoax. Where did you hear that?

@@thorstenschmidt21 from my Arbeitbetreuer on the courses how to write CV for german market

You can file a tax declaration every year and potentially expect a refund. We talk about it in the video we recommend to watch at the end 😊

@@simplegermany oh its on that one cool tnX

I'm regretting after coming here, I left a good job offer in India to come here to earn and save money now, litreally I'm not able to save a single penny it's literally depressing.

As long as you are young, healthy, childless, there are better countries, but...

The exact same in ireland (in fact id say most of the EU follows this)

So it is great for people who do not earn much money, but bad for people who do not earn much money? 😂

There are better options, if you can pay everything by your own, in every life situation. This is the case, if you are not depending on your income and if you are able to life from your net worth.

I disagree … I earned a little bit more than the average German, around 70 K gross in my final years, I was always a “hard worker” (retired now) and that was more than I would have earned in my job in the USA (my income went up immediately when I returned to Germany), and I feel I was treated well in Germany and have had a good life. What many foreigners proclaim to be “high taxes”, is actually the share of social security payments also deducted from the gross pay: health insurance, long term care insurance, retirement, unemployment. AND I NEVER MINDED PAYING SUCH HIGH SOCIAL SECURITY PAYMENTS, and was “freiwillig” insured in the GKV (Gesetzliche Krankenversicherung) for the last 15 years. PS: Together with my husband, who was a worker with on site training, no formal job education (Ausbildung) and therefore earned much less, our final income tax mostly came out to around 21 to 23 percent, after all deductions.

There is an inheritance tax for that

Even though I agree with you that tax rates are still high, you forget that for that 41% you basically get free education, free health care system, unemployment insurance, good roads, clean air (unless you want to live in the middle of a city) and public safety. Regarding generational wealth support: if anything then the German system does really not support that. The inheritance tax is actually really high which varies between 7-50%. See below: Up €75,000 - Tax Class I - 7% | Tax Class II - 15% | Tax Class III - 30% €75,000-€300,000 - Tax Class I - 11% | Tax Class II - 20% | Tax Class III - 30% €300,000-€600,000 - Tax Class I - 15% | Tax Class II - 25% | Tax Class III - 30% €600,000-€6,000,000 - Tax Class I - 19% | Tax Class II - 30% | Tax Class III - 30% €6,000,000-€13,000,000 - Tax Class I - 23% | Tax Class II - 35% | Tax Class III - 50% €13,000,000-€26,000,000 - Tax Class I - 27% | Tax Class II - 40% | Tax Class III - 50% More than €26,000,000 - Tax Class I - 30% | Tax Class II - 43% | Tax Class III - 50%

@@Panicradio I'm aware, and really grateful for all those rights and benefits we have here. I have been working for an American company remotely from Germany. The differences of rights and benefits I have vs my colleagues in the US are lightyears different. I'm not saying that Germany should scrape off it's social benefits and policies in that area. What I'm saying is that it should figure out a way to improve the existing system without punishing it's low and middle class with such high tax rates. Look at Switzerland. Or The Netherlands (and their 30% tax exemption rule). When it comes to social benefits, they are pretty much the same as Germany (if not better) yet the whole system works better there, i.e., less waiting for doctors or appointments at government offices AND less taxes.

@@epazzaia I'm aware :) Do yourself a favor and look up the inheritance tax brackets and corresponding percentages. In order to get taxed 42% for your inheritance, you need to inherit something worth over 20 million :)

In your calculation you mix up insurance payments (pension 'fund', healthcare, care) with the actual income tax which is way lower at roughly 23% with possible deductions thereafter. When comparing with US workers you need to add up the employers' part of the insurances as well. So 7k EUR a month would eventually convert to roughly 8k EUR/Mo.

The reason of this because you are assigned to a Taxclass (Steuerklass) when you start to work by your employer, based on your marital status or if you have kids (you have to pay attention which Taxclass your employer is assigning to you, especially if you are married Steuerklass 3+5 or 4 + 4, but never 3 + 3), and because the Tax office (Finanzamt) will assume that you already earned the same salary from the beginning of the year regardless of when you actually started to work in Germany as expat. This practically means exactly what you wrote: government charges the taxes monthly same amount by considering the annual gross. The good news is that this "overcharge" you can get it back during your yearly tax declaration.

@@Panicradio So basically, if I fired or married, i.e, anything can affect my tax rate happens, I'll get a refund the amount of the money which I have overpaid at the end of year ? I'm just trying to learn the system in detail, even though I got the system thanks to your explanation, it still doesnt make sense at all. I mean if the goverment charges people by considering their monthly gross income just looks easier and cause less workload in bureaucracy which Germany has a bad reputation about it due to no digitalization. Thanks again for the explanation ^_^

@@gorkemakcam If you get fired, then yes, you will get back the extra taxes you shouldn't have paid in case you are divorced in the middle of the year, it is a bit trickier. Generally: A joint tax declaration is always better, as it leads to a reduced tax rate. It can be still made for the year of separation, even if the separation took place in the beginning of the year. A joint tax declaration is especially advisable, if the taxes were paid on the basis of Lohnsteuerklasse (LSK) III and V. The spouses have to agree on a joint tax declaration and it is possible to sue the other spouse for his agreement to it. In the year following the separation the taxes are calculated in the same way as for unwed people. That also means that the LSK needs to be changed to I or at least to IV (or II, if you take care of minors). This is especially important, if you have been taxed with LSK III during the separation year. For better understanding: The LSK III/V reflect the possible result of a joint tax declaration of spouses not living in separation at the beginning of the year. Taxes automatically deducted monthly from your work income are just advance payments to the state tax agency (Finanzamt), on the assumption that the yearly income will be the monthly income, multiplied by 12. So you always should declare taxes (Einkommensteuererklärung), if you haven´t worked all year, as you get some (or a lot) of the advance payments back

@@Panicradio Thank you so much. I'll definetely apply for it then, because this is my first year in Germany as expat and started to work at March, so I have a chance to get worth refund for the taxes I have overpaid for 9 months.

@@gorkemakcam you are actually getting back roughly 2 month if you really think about it ;) because from March to December you are paying the tax that you should pay no matter, but I wish you all the best.