Tariff levels
The taxable income forms the tax base for the tax calculation. Depending on the amount of annual income, the following tariff levels are applied in calculating income tax. The marginal tax rate indicates how additional income within each of the tariff levels is to be taxed.
Portions of income above 1 million Euro per year are taxed at a higher tax rate of 55 percent for a limited period for the years 2016 to 2025.
Income tax rates for the year 2024
An inflation rate of 9.9 percent was calculated for the year 2024. Beyond the adjustment of two thirds (6.6 percent), the tariff levels were increased as follows:
- The first tariff level by 9.6 percent
- The second tariff level by 8.8 percent
- The third tariff level by 7.6 percent
- The fourth tariff level by 7.3 percent
| Tariff levels income in Euro | Marginal tax rate 2024 |
|---|---|
| 12,816 and below | 0 percent |
| Above 12,816 up to 20,818 | 20 percent |
| Above 20,818 up to 34,513 | 30 percent |
| Above 34,513 up to 66,612 | 40 percent2) |
| Above 66,612 up to 99,266 | 48 percent |
| Above 99,266 up to 1,000,000 | 50 percent |
| Above 1,000,000 | 55 percent1) |
1) Limited until 2025, 50 percent thereafter.
2) The percentage of the third tariff level was reduced from 41 percent to 40 percent.
Example
A trader has taxable income in 2024 of 40,000 Euro. Tax is calculated according to the tariff levels as follows:
| 12,816 x 0 percent | 0 Euro |
| 8,002 x 20 percent | 1,600.40 Euro |
| 13,695 x 30 percent | 4,108.50 Euro |
| 5,487 x 40 percent | 2,194.80 Euro |
| Income tax 2024 | 7,903.70 Euro |
Income tax rates for the year 2023
From 2023 onwards – in order to counteract the cold progression – the tariff levels (except for the last one above 1 million Euro) will be adjusted annually by two-thirds of the inflation rate.
An inflation rate of 5.2 percent was calculated for the year 2023. The first two tariff levels were raised by 6.3 percent above the calculated inflation rate. The remaining tariff levels were increased by two-thirds of the inflation rate, i.e., by 3.47 percent.
| Tariff levels income in Euro | Marginal tax rate 2023 |
|---|---|
| 11,693 and below | 0 percent |
| Above 11,693 up to 19,134 | 20 percent |
| Above 19,134 up to 32,075 | 30 percent |
| Above 32,075 up to 62,080 | 41 percent2) |
| Above 62,080 up to 93,120 | 48 percent |
| Above 93,120 up to 1,000,000 | 50 percent |
| Above 1,000,000 | 55 percent1) |
1) Limited until 2025, 50 percent thereafter.
2) The percentage of the third tariff level was reduced from 42 percent to 41 percent. This will be further reduced from 41 percent to 40 percent from 2024.
Example
A trader has taxable income in 2023 of 40,000 Euro. Tax is calculated according to the tariff levels as follows:
| 11,693 x 0 percent | 0 Euro |
| 7,441 x 20 percent | 1,488.20 Euro |
| 12,941 x 30 percent | 3,882.30 Euro |
| 7,925 x 41 percent | 3,249.25 Euro |
| Income tax 2023 | 8,619.25 Euro |
Income tax rates for the year 2022
| Tariff levels income in Euro | Marginal tax rate 2022 |
|---|---|
| 11,000 and below | 0 percent |
| Above 11,000 up to 18,000 | 20 percent |
| Above 18,000 up to 31,000 | 32,5 percent |
| Above 31,000 up to 60,000 | 42 percent |
| Above 60,000 up to 90,000 | 48 percent |
| Above 90,000 up to 1,000,000 | 50 percent |
| Above 1,000,000 | 55 percent1) |
1) Limited until 2025, 50 percent thereafter.
Example
A trader has taxable income in 2022 of 40,000 Euro. Tax is calculated according to the tariff levels as follows:
| 11,000 x 0 percent | 0 Euro |
| 7,000 x 20 percent | 1,400 Euro |
| 13,000 x 32,5 percent | 4,225 Euro |
| 9,000 x 42 percent | 3,780 Euro |
| Income tax 2022 | 9,405 Euro |
Income tax rates for the years 2020 and 2021
| Tariff levels income in Euro | Marginal tax rate 2020 and 2021 |
|---|---|
| 11,000 and below | 0 percent |
| Above 11,000 up to 18,000 | 20 percent |
| Above 18,000 up to 31,000 | 35 percent |
| Above 31,000 up to 60,000 | 42 percent |
| Above 60,000 up to 90,000 | 48 percent |
| Above 90,000 up to 1,000,000 | 50 percent |
| Above 1,000,000 | 55 percent1) |
1) Limited until 2025, 50 percent thereafter.
Example
A trader has taxable income in 2020 of 40,000 Euro. Tax is calculated according to the tariff levels as follows:
| 11,000 x 0 percent | 0 Euro |
| 7,000 x 20 percent | 1,400 Euro |
| 13,000 x 35 percent | 4,550 Euro |
| 9,000 x 42 percent | 3,780 Euro |
| Income tax 2020 | 9,730 Euro |
Income tax rates for the years 2016 to 2019
| Tariff levels income in Euro | Marginal tax rate 2016 to 2019 |
|---|---|
| 11,000 and below | 0 percent |
| Above 11,000 up to 18,000 | 25 percent |
| Above 18,000 up to 31,000 | 35 percent |
| Above 31,000 up to 60,000 | 42 percent |
| Above 60,000 up to 90,000 | 48 percent |
| Above 90,000 up to 1,000,000 | 50 percent |
| Above 1,000,000 | 55 percent1) |
1) Limited until 2025, 50 percent thereafter.
Example
A trader has taxable income in 2019 of 40,000 Euro. Tax is calculated according to the tariff levels as follows:
| 11,000 x 0 percent | 0 Euro |
| 7,000 x 25 percent | 1,750 Euro |
| 13,000 x 35 percent | 4,550 Euro |
| 9,000 x 42 percent | 3,780 Euro |
| Income tax for 2019 | 10,080 Euro |
The tax calculated from the tariff is then reduced by any applicable tax deductions. While special expenses and extraordinary burdens simply reduce the tax base for the tax calculation, tax deductions always reduce the tax itself.
Note
This is the standard approach to income tax calculation. In particular cases (such as when half-rate tax is being applied, when unemployment benefit is being claimed temporarily or where there is additional foreign income), the tax calculation may be somewhat more complex. The applicable tax-free basic income is derived from the combination of tax rates and the tax deductions that always apply to income from employment; it can be rather higher where further tax deductions apply.
Tip
On the website of the Federal Ministry of Finance (BMF), employees can calculate their net income with the aid of a gross/net calculator (→ BMF)German text. The self-employed can calculate their annual income tax liability using the income tax table (→ BMF)German text.
You can calculate your tax online using the tax calculation programs. Please bear in mind that the results of these calculations are merely guide values, since they cannot take account of all of the data relevant to the calculation. The only legally valid document is the notice of assessment from the tax office (→ BMF)German text that is responsible for you.
Responsible for the content: Federal Ministry of Finance
