Salary and tax class

Your tax class helps your employer calculate how much wage tax to withhold from your pay each month. It can change your take-home pay during the year, but it does not determine your final annual income tax.

In short

• Your tax class affects monthly wage-tax withholding, not your final income tax for the year.
• Give payroll your Steuer-ID, the 11-digit identification number assigned to you once. Your tax class is a separate withholding feature and can change.
• Married spouses who are both fully tax-liable and not permanently separated are in class IV unless both apply for classes III and V. One spouse can apply to leave III or V, and then both are placed in IV.
• Class VI applies to a second or further job taxed through individual wage-tax withholding. An eligible flat-taxed Minijob is different: ask payroll which taxation method the employer uses.
• A registered partnership or a marriage abroad does not automatically mean class III. Ask the Finanzamt which rules apply to your situation.

What you need to know

Section 38b of the Income Tax Act places employees in tax classes (Steuerklassen) for withholding wage tax (Lohnsteuer). Your class affects that deduction; it is not your final annual tax bill or your Steuer-ID. The Federal Central Tax Office assigns the 11-digit Steuer-ID once. Payroll uses both the number and your class. The tax-ID guide explains the letter you receive.

Section 38b sets out the following classes:

• Class I covers employees who are fully tax-liable and single, or who are married, widowed, or divorced and do not meet the conditions for class III or IV. It also covers employees who are only limitedly tax-liable.
• Class II is the class I group, in the fully tax-liable branch, when the relief amount for a single parent has to be taken into account.
• Class III covers a married employee when both spouses are fully tax-liable, they do not live permanently apart, and the other spouse is placed in class V on an application by both. It also covers a widow or widower for the calendar year after the year of death, on the conditions in the section, and a narrower case in the year a marriage is dissolved.
• Class IV covers married employees when both spouses are fully tax-liable and they do not live permanently apart. That includes the case where one spouse earns no wages and nobody has applied for the III/V split.
• Class V is the class IV employee whose spouse is in class III on an application by both.
• Class VI applies to a second or further job under individual wage-tax withholding, and in the cases section 39c names. A flat-taxed eligible Minijob does not use a tax class for that pay.

“Fully tax-liable” for classes III and IV has the meaning given in section 38b. If you are unsure how the rules apply to a cross-border household, ask the Finanzamt.

What to do

1. Give payroll your Steuer-ID when they ask, and check the class printed on the first payslip. The Federal Central Tax Office says the number is also on the wage-tax certificate.
2. If you are married and both of you are fully tax-liable and not permanently separated, class IV is the default in the statute when nobody has applied for III and V. Moving one spouse to III and the other to V takes an application by both. One spouse alone can apply to leave III or V, and then both are placed in IV.
3. Tell payroll about concurrent jobs. For a second individually taxed job, class VI applies. For an eligible Minijob, ask whether the employer uses flat-rate or individual taxation; do not assume the same treatment for both. The Minijob guide explains the separate employment rules.
4. You can ask for a less favourable class, or for fewer child allowances, if you want more tax withheld during the year. That application uses the official form and your own signature. It does not change the fact that the Finanzamt can still assess the year.
5. Keep your payslips. If the class looks wrong, ask payroll which features they retrieved and check with the Finanzamt before relying on a combination suggested in a forum. Child allowances within classes I to IV follow the fractions and applications in section 38b(2); ask how they apply to you.

Class VI when the tax ID is missing or the job is a second one

Section 38b applies class VI to pay from a second or further job when more than one employer pays you at the same time, and to the cases in section 39c. An eligible flat-taxed Minijob stays outside that class.

If you are at fault for not giving the employer an identification number already assigned to you, together with your date of birth, so the electronic wage-tax features can be retrieved, or if the Federal Central Tax Office refuses to send those features, section 39c(1) requires the employer to calculate wage tax under class VI.

If the number is still to be assigned and that is not your fault, or a technical fault blocks the retrieval, the employer uses the probable class under section 38b for at most three calendar months. If you still have not provided the number and your date of birth after those three months, class VI applies back over that period.

Give payroll your Steuer-ID and date of birth as soon as you have them. In the three-month case, once the electronic features are available, your employer reviews the earlier months and balances too much or too little wage tax at the next payroll. A genuine second job stays in class VI after the number arrives. If class VI was used because you did not pass on a number you already had, or because the Federal Central Tax Office refused the retrieval, ask payroll and the Finanzamt which correction applies once the features are available.

Common mistakes

• Assuming a city office sets your tax class. The classes are in the Income Tax Act; the Finanzamt and your employer apply them.
• Confusing the class with the Steuer-ID. One is a withholding feature that can change. The other is the lifelong number. You need the number even when the class is obvious.
• Treating every side job as class VI. That class applies to individual wage-tax withholding; an eligible flat-taxed Minijob is outside that class-based deduction. Do not change the method without checking payroll and your own circumstances.
• Assuming a registered partnership or marriage abroad automatically places you in class III because it did for a colleague. The section refers to spouses and full tax liability; ask the Finanzamt how the rules apply to you.