Salary, taxes, and social security, If you work in Germany, various taxes will be deducted from your gross salary directly before you receive your salary (net salary). A distinction is made between taxes and social security contributions.
The exact amount corresponding to these withholdings can be seen on your payroll.
However, to get an idea of the amounts in advance, you can search the Internet for gross-net calculators.
You will find an example of how to calculate what is deducted from your gross salary in the chart “Salaries in Germany”.
In Germany, the most important tax for a worker is income tax, that is, the tax on your salary. Each month, your company will pay income tax on your behalf to the tax office in the form of “salary tax”. There you still do not have to worry about anything but keep the documents related to tax issues well.
The amount of income tax depends on your income. The higher your income, the higher the tax rate. Your tax category is also decisive when it comes to paying taxes. This depends, for example, on whether you are married or have children.
If you are a member of a religious community that collects such tax, your company will also pay the church tax to the tax office.
Germany has a very well-developed system that provides citizens with financial security, for example in case of illness or unemployment.
If you earn income from your work in Germany that exceeds a certain threshold, your work will be subject to the payment of social security contributions. This means that you have to be affiliated with certain insurances and pay them contributions automatically. In general,
these are the following insurances:
- Mandatory health insurance pays for doctor visits and many medications and therapies.
- the dependency insurance mandatory provides basic coverage in the event that, due to illness, you require prolonged care. Most of the time, this affects elderly people.
- Compulsory pension insurance pays the workers’ pension once they have retired. The amount of the pension is roughly determined by earnings and the number of years you have worked in Germany.
- Compulsory accident insurance covers the costs of health care and re-employment after having suffered an accident at work or an occupational disease.
- Compulsory unemployment insurance provides an amount of income for a certain period of time to unemployed people, as long as certain requirements are met. Generally, you must have been insured for at least one year in the last two years and be looking to work again.
To be affiliated with the social security system, you must pay a certain percentage of your salary. Your company will also pay a fixed amount. The money is paid directly from your gross income to the insurance company. You do not have to make any deposit. As an employee, you are automatically affiliated with pension, dependency, accident, and unemployment insurance. There are no different companies. However, health insurance is a special case.
social security card
As a worker, you will receive a social security card with a social security number. Please inform your company of the number. Keep your social security card, as you will need the number often and it will stay the same even if you change employers. If you lose your social security card, you can request a replacement from the German pension insurance company ( Deutsche Rentenversicherung ). social security card with a social security number. Please inform your company of the number. Keep your
Statement of income
After the end of the calendar year, you can request that the State verify if you have paid the excess income/salary tax. For this, you must submit your statement of income to the tax agency and indicate how much you have earned in the last year and the amount of taxes that your company has paid to the tax agency.
In some cases, the income statement is mandatory, for example, if you work for several companies. However, most of the time it is voluntary. As the State returns money to most people, in many cases it is also worth submitting the income tax return even if it is not mandatory.
You can do the income statement yourself. To do this, use the forms provided by the tax office or the ELSTER program. There are also smartphone apps and software that can help you. You can also contact a tax advice association or hire tax advice
exempt from income tax
Even if a person is exempt from income tax for some reason, most people will still pay some form of tax. You have to pay VAT on goods you buy and property tax if you own a home. There are also user taxes such as those paid for petrol, tobacco, or alcohol.
Most people are required to pay Social Security and Medicare taxes if they work, but there are exceptions. While the Amish community pays state and federal income taxes as well as property and sales taxes, the group is exempt from paying Social Security or Medicare.
This is because the Amish community views the Social Security tax as a form of commercial insurance and strongly opposes it. The group believes in self-sufficiency rather than relying on government aid programs. Amish families take care of their