Income Tax

Employees in Germany are generally subject to income tax. Germany has a progressive income tax system, which means that the tax rate increases as taxable income increases.

For tax purposes, you need a tax identification number (Steueridentifikationsnummer, Steuer-ID or IdNr.). This is a unique 11-digit number that remains valid for your entire life.

If you register your residence in Germany for the first time, your registration data is generally forwarded to the tax authorities and a Steuer-ID is assigned to you. If you have already been assigned a Steuer-ID but no longer know it, you can request it again from the relevant authorities.

As soon as you have your Steuer-ID, please provide it to the CISPA Human Resources Department so that the necessary payroll and tax information can be processed.

Germany has double taxation agreements with many countries. These agreements determine which country has the right to tax certain types of income and are intended to prevent the same income from being taxed twice.

For employees, wage tax (Lohnsteuer) is generally deducted directly from the salary by the employer. The amount withheld depends on factors such as your income and your applicable wage tax characteristics, including your tax class (Lohnsteuerklasse).

• Class I: Generally applies to single employees and to certain married, widowed, or divorced employees who do not meet the requirements for Classes III or IV.
• Class II: Applies to employees who qualify for the tax relief available to single parents.
• Class III: May apply to married employees upon application if the spouses meet the applicable requirements and the other spouse is placed in Class V. It may also apply in certain cases to widowed employees.
• Class IV: Generally applies to married employees when both spouses are subject to unlimited income tax liability in Germany and are not permanently separated.
• Class V: Applies to a married employee when the other spouse is placed in Class III upon their joint application.
• Class VI: Generally applies to income from a second or additional employment relationship.