Income tax in Germany for newcomers – tax classes, 2026 rates, church tax and your first return
Last updated 25 September 2026Rules checked every MondayOfficial sourcesSources & methodology →
Your first German payslip arrives with wage tax already taken off, and perhaps church tax too. Here is how income tax in Germany works for newcomers in 2026 – residence, tax classes, rates and allowances, the tax return, and what customs expects when you bring your belongings and pets.
Income tax in Germany changed on 1 January 2026, when the current Income Tax Act took effect for the 2026 tax year: the basic tax-free allowance, the Grundfreibetrag, is now €12,348 of taxable income. Since the same date, employees past the statutory retirement age who keep working in a job subject to social insurance can earn up to €2,000 a month tax-free under the new Aktivrente, according to the Federal Ministry of Finance. And since July 2026 the MeinELSTER+ app prepares 2025 returns automatically for simple cases.
More is only proposed. The draft Income Tax Reform Act 2027, adopted by the federal cabinet on 2 September 2026, would raise the basic allowance to €12,564 in 2027 and €12,900 in 2028, lift the employee flat-rate deduction from €1,230 to €1,430 and add a 47 per cent rate from €280,000. The bill still has to pass the Bundestag and the Bundesrat.
When do you pay income tax in Germany?
Under the Income Tax Act you are taxed on your worldwide income once you have a Wohnsitz (residence) or gewöhnlicher Aufenthalt (habitual abode) in Germany. Renting a flat you evidently mean to keep and use can make you resident from day one: if Anna rents a flat in Frankfurt from 1 March to live in, she is resident from 1 March. A continuous stay of more than six months always counts as habitual abode from the start.
Without either, only your German income is taxed. Cross-border workers can ask to be treated as fully taxable if at least 90 per cent of their income is taxed in Germany, or their other income stays below the basic allowance, with a certificate from their foreign tax authority.
Which German tax class are you in?
Your employer withholds Lohnsteuer (wage tax) each month using your Steuer-ID (tax ID), an 11-digit number that never changes. The Federal Central Tax Office (BZSt) sends it by letter after your Anmeldung (address registration) – in Munich, the city says, about two to four weeks after you first register. Your Finanzamt (tax office) is the one where you live. The deduction also depends on your Steuerklasse (tax class):
| Tax class | Who it is for |
|---|---|
| I | Single employees |
| II | Single parents who qualify for the single-parent relief |
| III and V | Married couples, on the joint application of both partners |
| IV | Married employees – the default |
| VI | A second or further job with another employer |
Source: Income Tax Act (Einkommensteuergesetz) and Federal Central Tax Office, read 23 September 2026.
Couples assessed jointly benefit from income splitting: their tax is twice the tax due on half of their joint taxable income. If you belong to a church that levies Kirchensteuer (church tax), your employer deducts it too. Berlin's service portal gives the rate there as 9 per cent of your income or wage tax; elsewhere, ask your tax office.
How much income tax will you pay in Germany in 2026?
Allowances reduce your taxable income; the scale then applies, rounded down to full euros.
| Item (2026 tax year) | Amount |
|---|---|
| Basic tax-free allowance (Grundfreibetrag) | Taxable income up to €12,348 is taxed at zero |
| Progressive zones | €12,349 to €17,799, then €17,800 to €69,878 |
| 42 per cent | €69,879 to €277,825 |
| 45 per cent | From €277,826 |
| Employee flat-rate deduction for work expenses | €1,230 a year, unless you prove higher costs |
| Commuting allowance | €0.38 per full kilometre of the one-way distance, per working day; at most €4,500 a year unless you drive your own or a company car |
| Savers' allowance on investment income | €1,000, or €2,000 for jointly assessed spouses |
| Single-parent relief | €4,260 a year, plus €240 for each further child |
| Child allowances, per child and parent | €3,414 plus €1,464 |
Source: Income Tax Act (Einkommensteuergesetz), read 23 September 2026.
The solidarity surcharge is 5.5 per cent of your income tax, but under the current Solidarity Surcharge Act it applies only when that tax exceeds €20,350, or €40,700 for joint assessment, with a phase-in zone above the threshold.
Social insurance comes off the same payslip. The Deutsche Rentenversicherung gives the 2026 rates as 18.6 per cent for pension, 2.6 per cent for unemployment, 14.6 per cent for health plus your fund's additional contribution and 3.6 per cent for long-term care. You and your employer generally each pay half – childless members pay a care surcharge alone – on pay up to €8,450 a month for pension and unemployment and €5,812.50 for health and care. Parts 8 and 9 explain the rest.
Do you have to file a German tax return?
Many employees never have to. Filing is voluntary unless one of these applies – and often worth it to reclaim withheld wage tax.
| Your situation | Tax return |
|---|---|
| You had several employers at the same time | Compulsory |
| You and your spouse used tax classes III and V, or the factor method with class IV | Compulsory |
| Other income, or wage-replacement benefits such as Elterngeld or unemployment benefit, above €410 | Compulsory |
| None of these applies | Voluntary |
Source: Income Tax Act (Einkommensteuergesetz), section 46, read 23 September 2026.
Returns are due by 31 July of the following year – seven months after year-end – or, if a tax adviser prepares yours, by the last day of February of the second year after, under the Fiscal Code (Abgabenordnung). Filing through ELSTER, the tax administration's portal, is free; its MeinELSTER+ app suits simple cases such as career starters, singly assessed employees and pensioners. ELSTER's hotline, 0800 52 35 055, answers technical questions only.
Bringing your belongings and pets to Germany
From another EU country, goods for your personal use come in free of customs duty and tax, with special rules for tobacco and alcohol; declare cash of €10,000 or more if asked, says German customs (Zoll). From outside the EU, Übersiedlungsgut (removal goods) enter duty-free on these conditions:
| Removal goods from outside the EU | Rule |
|---|---|
| Where you lived | Normal residence outside the EU for at least 12 months |
| What qualifies | Household effects, private vehicles, household provisions, pets and portable professional instruments |
| What does not | Alcohol, tobacco, commercial vehicles and business equipment |
| Ownership | Owned and, except consumables, used for at least six months before the move |
| Deadline | Customs clearance within 12 months of moving, declared in writing on form 0350 |
| Afterwards | No lending, hiring out or transfer for 12 months; no import VAT, but excise duty applies; a car registered outside the EU pays German vehicle tax |
Source: German Customs (Zoll), read 23 September 2026.
Dogs, cats and ferrets travelling within the EU need a microchip, a rabies vaccination given at 12 weeks or older and valid from 21 days after the primary vaccination, and an EU pet passport from an authorised vet. Since 2026 the rules are in Commission Delegated Regulation (EU) 2026/131; one person may bring at most five pets that are not for sale.
From outside the EU, the European Commission also requires a rabies antibody test of at least 0.5 IU/ml – sampled at least 30 days after vaccination and at least 90 days before the health certificate is issued, unless your country is exempt – a health certificate valid for 10 days until the entry check, and entry through a designated travellers' point of entry. Animals that fail may be sent back, quarantined for several months or, in some cases, put down, at your expense. Germany bans the import of Pit Bull Terriers, American Staffordshire Terriers, Staffordshire Bull Terriers, Bull Terriers and their crosses. In Berlin, register your dog for dog tax within one month of moving.
What to do now
| Step | What | When |
|---|---|---|
| 1 | Register your address so the BZSt can send your Steuer-ID (part 3) | Within two weeks of moving in |
| 2 | Give your employer the Steuer-ID; check the tax class on your first payslip | When you start work |
| 3 | Keep records of commuting days and work costs above €1,230 | Throughout the year |
| 4 | File through ELSTER if you must, or to reclaim tax | By 31 July of the following year |
| 5 | Declare removal goods on form 0350 | Within 12 months of moving |
Source: Federal Registration Act, Income Tax Act, Fiscal Code and German Customs, read 23 September 2026.
Official sources
The official pages this guide is based on, read 23 September 2026. Links open the authority’s own website.
- Einkommensteuergesetz § 1 · gesetze-im-internet.de
- Abgabenordnung § 8 · gesetze-im-internet.de
- Abgabenordnung § 9 · gesetze-im-internet.de
- Einkommensteuergesetz § 32a · gesetze-im-internet.de
- Einkommensteuergesetz § 52 · gesetze-im-internet.de
- Solidaritätszuschlaggesetz 1995 § 3 · gesetze-im-internet.de
- Einkommensteuergesetz § 9a · gesetze-im-internet.de
- Einkommensteuergesetz § 20 · gesetze-im-internet.de
- Einkommensteuergesetz § 10c · gesetze-im-internet.de
- Einkommensteuergesetz § 32 · gesetze-im-internet.de
- Einkommensteuergesetz § 24b · gesetze-im-internet.de
- Einkommensteuergesetz § 9 · gesetze-im-internet.de
- Einkommensteuergesetz § 38b · gesetze-im-internet.de
- Einkommensteuergesetz § 46 · gesetze-im-internet.de
- Abgabenordnung § 149 · gesetze-im-internet.de
- ELSTER – official tax portal of the German tax administration · elster.de
- Bundeszentralamt für Steuern (BZSt) – The identification number · bzst.de
- Service-Portal Berlin – Kirchensteuer – Festsetzung · service.berlin.de
- Deutsche Rentenversicherung – Werte der Rentenversicherung ( · deutsche-rentenversicherung.de
- SGB III § 346 · gesetze-im-internet.de
- Bundesministerium für Gesundheit – Beiträge ( · bundesgesundheitsministerium.de
- Bundesministerium für Gesundheit – Finanzierung der sozialen Pflegeversicherung · bundesgesundheitsministerium.de
- Sozialversicherungsrechengrößen-Verordnung 2026 · gesetze-im-internet.de
- Fünfte Mindestlohnanpassungsverordnung – MiLoV5 · gesetze-im-internet.de
- Bundesministerium für Gesundheit – Versicherte in der GKV ( · bundesgesundheitsministerium.de
- Bundesministerium der Finanzen – FAQ zur Aktivrente · bundesfinanzministerium.de
- Bundesministerium der Finanzen – Pressemitteilung 17/2026 vom 02.09.2026 (Einkommensteuerreform) · bundesfinanzministerium.de
- Zoll (German Customs, Generalzolldirektion) – Transferring residence · zoll.de
- Zoll – Travel within the EU · zoll.de
- European Commission (DG SANTE) – Travelling with a pet within the EU · food.ec.europa.eu
- European Commission (DG SANTE) – Bringing a pet into the EU from a non-EU country · food.ec.europa.eu
- Zoll – Provisions on the import of pet animals from non-EU states · zoll.de
- Zoll – Dangerous dogs · zoll.de
- Bundesministerium für Landwirtschaft, Ernährung und Heimat – Tips on planning journeys with animals · bmleh.de
- Service-Portal Berlin – Hundehaltung – Hund steuerlich anmelden · service.berlin.de
Relocate in Europe provides general information, not legal or financial advice for your individual situation. Check with the authority named above before you act – rules change, and your case may differ.