In Germany, tax class (Steuerklasse) is an important factor that determines how much income tax an individual will have to pay. The tax class is assigned to a person based on their marital status, number of dependents, and income level. There are currently six different tax classes in Germany, ranging from tax class I to tax class VI.
The tax class determines the amount of income tax that will be deducted from a person's salary each month. Generally speaking, tax class I applies to single individuals with no children, tax class II to single parents, tax class III to married couples where one spouse earns significantly more than the other, tax class IV to married couples with roughly equal incomes, tax class V to married couples where one spouse earns significantly less than the other, and tax class VI to individuals who have more than one job.
The tax class is important because it can have a significant impact on the amount of income tax that a person has to pay. For example, if a married couple is both assigned to tax class I, they may end up paying more in taxes than if they were assigned to tax class IV. It is important to note that individuals can change their tax class at any time by submitting a request to the tax office. This can be especially important in situations where a person's marital status changes or they have a child, as this can affect their tax liability.
Tax Class in Germany:
We hope you understand the importance of the Tax class in Germany and have a high-level overview of the Tax classes. Here, I am providing a detail of the different Tax Class in Germany:
Class I: Single/widowed/civil partnership/divorced. Married persons not in tax classes II, III or IV
Class II: Single but entitled to single parent allowance
Class III: Married but spouse does not earn wages/is classified under tax category V/recently deceased
Class IV: Married (not separated); both earning and residing in Germany
Class V: Married but one spouse is classified under tax class III
Class VI: Individuals on multiple wages from more than one employer
As a rule of thumb, married people are either in tax class III-V or IV-IV. If both of your salary is similar and comparable with each other, you can be in tax class IV-IV. However, if one person is earning 60% and above of total home income, then the person earning more should be in Tax Class III and the other one should be in Tax Class V.
How to Change the Tax Class
We are going to talk about the offline process to change your tax class.
Step 1: Find your local Tax Office
You can google about your local tax office (Finanzamt). Address of tax office in Munich is: Finanzamt München, Servicezentrum, Deroystraße 12, 80335 München.
Step 2: Fill in the form
Download and fill the form (you can download it by doing a search on your friendly search engine) or you can get the form from the Tax office and fill it. If you are going to fill the form at the tax office, you and your spouse should go there together as you both need to sign the form.
Step 3: Visit the Local Tax office
Once the form is filled, you can walk-in to the tax office. The opening time could be checked on google but they start around 7:30 in the morning and if you visit them early in the morning, there will be less rush. Please carry your passport (and resident permit if you have received it).
Note: If you have already filled and signed the form, you don’t need to go with your spouse. Only one person can visit and submit the form. However, if you are planning to get the form from the Tax office, you both need to go together as you need to have physical signature on the form.
Once you are there and if you have already filled and signed the form, take a token, and wait. Once the token number is displayed, visit to the respective counter, and submit the form. You may ask for a confirmation letter for your reference purpose.
If you haven’t filled the form already, take the form from the office and fill it. There is a reference guide on how to fill the form for changing the tax class.
Reference Guide to fill in the form for tax class change <Link to be added soon>.
Note: Usually the change of tax class is applicable from the next month, e.g., if you have visited the tax office in May 2023, the new tax class will be applicable from June 2023.
Once it is completed and you have the confirmation, it is done! Your tax class is changed, and your payroll team will get the information of the new tax class from the next month onwards.
We hope you find it informative and helpful as you embark on this exciting new chapter in your life in one of Germany's most dynamic and exciting cities.
Please refer to the official website for City of Munich and Tax office for updated details.
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