Tax Classes in Germany

Tax Classes in GermanyTax class (Lohnsteuerklasse) determines the value of the German income tax, “solidarity tax” church tax and the taxpayer. Selecting a tax class also affects the value of many social benefits – unemployment benefits, social security benefits, child allowances, benefits and maternity leave, etc.

Сlass I

The first tax class includes:
• unmarried (single);
• married spouses who reside abroad;
• married whose spouse long live separately;
• divorced;
• widowers (widows), if the spouse’s death has been more than a year;
• consisting in a registered civil partnership.
If there are prerequisites to class III or IV, Class I can not be assigned.

Class II

The second tax class includes the same persons as the first class, if they:
• alone raise at least one minor child (a single mother or single father) and
• are entitled to special government assistance for such categories of citizens (Alleinerziehendenentlastungsbetrag).

Class III

The third tax class includes:
• married:
– live with a spouse, with a common household;
– have not selected the tax class IV;
• widowers (widows):
– to the death of a spouse married couple lived together with a common household and
after the death of a spouse is not older than one year.

When a spouse choosing tax class III other spouse automatically becomes V class. Such a model III + V is recommended to choose if spouse that chooses tax class III, has an income well in excess of the income of the spouse with the tax class V.

Class IV

This tax class includes:
• married:
– live with a spouse, a common household and driving
– have not selected III or V of the tax class.

By default both spouses, comply with the conditions, assigned tax class IV. This model IV + IV recommended for spouses of roughly the same income. Spouses are also entitled to apply for the transition to the model III + V. At the end of the year when this model spouses strongly encouraged to complete a tax card, resulting in the recalculation they can get a certain amount back (provided that they paid more taxes – than they were expected), or pay extra.

Class V

Fifth tax class automatically granted to individuals whose spouses have received tax class III.

Class VI

Sixth tax class is optional and is issued to individuals for additional tax cards if the taxpayer works at several jobs. This is the most “expensive” tax class, assuming the highest tax rates in which the non-existent non-taxable amounts.

Family models

Couples have various tax models, depending on the type of the family:
• married and cohabiting spouses: IV + IV or III + V (of their choice);
• married and long-estranged spouses: I + I;
• consisting in a registered civil partnership (“same sex marriage»): I + I;
• cohabiting couples without official registration: I + I.

Depending on the tax models for partners share in the total family contribution to tax is distributed unequally. However, in the case of models IV + IV and III + V the total amount of tax paid remains unchanged (subject to filing a tax return at the end of the year and the possibility of part of the money back. In case of I + I model the total amount of tax changes.

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