Calculate monthly Lohnsteuer, Soli, Kirchensteuer, and social contributions for your employees.
What are the German tax classes (Steuerklassen)?
Germany has 6 tax classes: I (single), II (single parent), III (married higher earner), IV (married equal earners), V (married lower earner, paired with III), and VI (second or additional job). The class determines tax allowances and withholding amounts.
How is Lohnsteuer different from Einkommensteuer?
Lohnsteuer is the monthly payroll tax withheld by the employer and is an advance payment of Einkommensteuer (income tax). The final income tax is determined in the annual tax return, where overpayments may be refunded or underpayments collected.
Can married couples optimize their tax class combination?
Yes. Married couples can choose between III/V and IV/IV combinations. The III/V combination is beneficial when one spouse earns significantly more. However, the final tax burden is the same after filing the annual return; the difference is only in monthly cash flow.
Disclaimer: These calculations are estimates based on 2025 German tax rules and should not be considered professional tax advice. Consult a Steuerberater for your specific situation.
All employer and employee payroll contributions explained
What is the total payroll tax burden in Germany?
The combined employee and employer social insurance rate is about 40% of gross salary (roughly 20% each). Add income tax of 14-45% and the total payroll burden for a mid-range earner is about 50-55% of gross salary. On a €4,000 gross salary, about €2,000-€2,200 goes to taxes and social contributions between employee and employer.
What are the pension insurance rates?
Pension insurance (Rentenversicherung) is 18.6% of gross salary, split equally: 9.3% employee and 9.3% employer. Contributions apply up to the Beitragsbemessungsgrenze of €7,550 per month (West) or €7,450 (East) in 2025. Above this, no additional pension contributions are due. The maximum monthly contribution is about €702 per person.
How does health insurance work for payroll?
Health insurance (Krankenversicherung) has a base rate of 14.6% plus a Zusatzbeitrag averaging 1.7%, totalling about 16.3%. This is split equally between employer and employee (about 8.15% each). Contributions apply up to €5,512.50 per month. Above €69,300 annual income, employees can choose private health insurance (PKV) instead.
What is the unemployment insurance rate?
Unemployment insurance (Arbeitslosenversicherung) is 2.6% of gross salary, split equally at 1.3% each for employer and employee. It applies up to the same ceiling as pension insurance (€7,550/month West). On a €4,000 salary, you pay €52 and your employer pays €52 per month. This funds ALG I benefits if you lose your job.
How does long-term care insurance (Pflegeversicherung) work?
Long-term care insurance (Pflegeversicherung) is 3.4% of gross salary. Employees with children pay 1.7%, while childless employees over 23 pay an extra 0.6% (2.3% total). Employers pay 1.7%. The surcharge for childless people costs about €24 extra per month on a €4,000 salary. Parents with 2+ children get small reductions.
When does the employer report and pay payroll taxes?
Employers must submit the Lohnsteueranmeldung (payroll tax return) by the 10th of the following month via ELSTER. Social insurance contributions must be paid by the third-last banking day of the current month (estimated if exact amount is not yet known). Late payments trigger penalties and interest from the Finanzamt and social insurance carriers.
Bundesfinanzministerium-Aligned: Based on 2025 Bundesfinanzministerium rates and thresholds. For personal advice, speak to a qualified Steuerberater (tax adviser).
Disclaimer: This calculator provides estimates based on current German tax rates and thresholds for the 2025 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified tax adviser before making financial decisions. Read our terms
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