2024 Update: Key tax rate changes for 2024:

• Tax-free income threshold increased to approximately 11,604 euros (up from 10,908 in 2023)
• Highest income tax rate of 42% now applies to income over approximately 66,000 euros
• “Rich tax” of 45% starts at around 283,000 euros

The income tax gets deducted from your monthly salary by your employer. It is a progressive tax ranging from 14% to 42%.

Income up to 11,604 euros in 2024 is tax-free (Grundfreibetrag). Income more than 66,000 euros gets taxed with the highest income tax rate of 42% (Spitzensteuersatz). The so-called rich tax (Reichensteuer) of 45% starts at an income of 283,000 euros.

When calculating how much income tax you need to pay, you need to differentiate between the marginal tax rate (14 – 42%) and the average tax rate, which is what you will actually pay (usually it is lower than the marginal tax rate).

Credit: Content by Anshul Srivastava
DISCLAIMER: The information provided here is for general informational purposes only and does not constitute professional tax, legal, or financial advice. I am not a licensed tax consultant under German law. For tailored advice specific to your situation, please contact a certified Steuerberater or tax advisor.