AuthoritiesGermany

The tax office (Finanzamt) and taxes in Germany

Das Finanzamt und die Steuern

Tax ID, tax class and tax return: anyone working in Germany should know these basics and keep to deadlines.

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Overview

Taxes in Germany are organised and intricate, and most employees have tax deducted directly from their salary, but this does not free you from knowing your rights and duties. The tax office (Finanzamt) assesses tax, receives returns and refunds excess amounts.

This guide explains the tax ID, tax classes and salary deductions, when a tax return must be filed and when filing voluntarily helps you reclaim part of what you paid, how to submit it through the ELSTER platform, and what happens with errors or delays. This is general information and not tax advice, and tax aid associations can help.

1

The tax ID and the tax classes

Every resident receives an 11-digit tax identification number (Steuer-ID) sent by post after registering your address, and it stays with you for life.

  • Your employer needs it to withhold income tax from your salary.
  • There are six tax classes (Steuerklassen): the first for single people, the second for single parents, the third, fourth and fifth for married people with different distributions, and the sixth for a second job.
  • The class determines the amount withheld monthly but does not change the final annual tax.
  • Choose the distribution best suited to your family with your employer or an adviser.
2

What is deducted from the salary

The gross salary (brutto) is what appears in the contract, and net (netto) is what reaches your account after deductions: income tax, in some cases the solidarity surcharge, church tax if you belong to a recognised church, and social security contributions including health, pension, unemployment and care insurance.

  • These deductions form a large part of the salary, so do not be surprised when you see the payslip (Gehaltsabrechnung).
  • Read your payslip every month and check that the numbers and your class are right, and report mistakes to payroll.
3

The tax return and when to file it

Some groups must file an annual tax return (Steuererklärung): the self-employed, people with additional income or rental income, married people in classes three and five, and those asked to do so. An ordinary employee may file voluntarily and often gets money back because work expenses such as commuting, equipment, courses, relocation costs and insurance costs can be deducted.

  • A voluntary return has a four-year period, and a compulsory one usually a deadline of 31 July of the following year with a possible extension.
  • Do not let deadlines pass.
4

How to file through ELSTER

ELSTER is the official electronic tax platform.

  • You register and receive a digital certificate after an activation letter by post that takes several days, so register early.
  • You enter your data and attach receipts, keeping them for years in case the office asks for proof.
  • Simplified commercial programs exist, and tax aid associations (Lohnsteuerhilfeverein) provide help for an annual membership fee.
  • After filing, the tax office issues the assessment notice (Steuerbescheid), which you review, and within one month you can object if you see a mistake.
5

Errors, delays and other taxes

Someone who is late with a compulsory return may face a late-filing penalty and an estimated income.

  • If you find an error in your return, correct it quickly and inform the office, since voluntary correction is better.
  • Other taxes include value-added tax (Mehrwertsteuer) included in prices, vehicle tax, dog tax and the broadcasting fee (Rundfunkbeitrag) per household.
  • Freelance businesses have special rules such as registering the activity and filing VAT returns.
  • If you have tax debts, contact the office to request payment by instalments.

Step by step

  1. 1

    Check that your tax ID has arrived by post after registering your address.

  2. 2

    Give the number and your class to your employer and review the payslip monthly.

  3. 3

    Keep receipts for professional expenses all year.

  4. 4

    Register in ELSTER early and complete the activation code.

  5. 5

    File the return within the deadline and review the assessment notice.

  6. 6

    Object within a month if you find an error, or ask for tax help.

Documents checklist

  • The tax ID (Steuer-ID) and the registration certificate.
  • Payslips and the annual tax certificate from the employer.
  • Receipts for work expenses, courses and commuting.
  • Proof of insurance and of donations, if any.
  • Bank account details to receive refunds.

Key vocabulary

  • dasFinanzamt
    tax office
  • dieSteuer-ID
    tax identification number
  • dieSteuerklasse
    tax class
  • dieSteuererklärung
    tax return
  • derSteuerbescheid
    tax assessment notice
  • dieGehaltsabrechnung
    payslip
  • Werbungskosten
    work-related expenses
  • dieMehrwertsteuer
    value-added tax
  • dieRückerstattung
    refund
  • derEinspruch
    objection
  • dieFrist
    deadline

Useful phrases

  • Ich habe meine Steuer-ID noch nicht erhalten.I have not yet received my tax ID.
  • In welcher Steuerklasse bin ich?Which tax class am I in?
  • Bis wann muss ich die Steuererklärung abgeben?By when do I have to submit the tax return?
  • Kann ich die Fahrtkosten absetzen?Can I deduct my travel costs?
  • Ich möchte Einspruch gegen den Steuerbescheid einlegen.I would like to object to the tax assessment.
  • Könnten Sie mir bei der Steuererklärung helfen?Could you help me with the tax return?

At the tax aid association

  • Beraterin

    Guten Tag. Worum geht es?Good day. What is it about?

  • Sie

    Ich arbeite seit einem Jahr hier und möchte meine Steuererklärung machen.I have worked here for a year and would like to do my tax return.

  • Beraterin

    Haben Sie Ihre Steuer-ID und die Lohnsteuerbescheinigung?Do you have your tax ID and the wage tax certificate?

  • Sie

    Ja, und auch Belege für Fahrtkosten und einen Deutschkurs.Yes, and also receipts for travel costs and a German course.

  • Beraterin

    Sehr gut. Die Kosten können Sie meist absetzen. Sie bekommen wahrscheinlich Geld zurück.Very good. You can usually deduct these costs. You will probably get money back.

  • Sie

    Das freut mich. Was kostet der Mitgliedsbeitrag?I am glad. What does the membership fee cost?

Common mistakes

  • Ignoring the voluntary tax return even though money could be reclaimed.
  • Not keeping receipts, so that you lose the right to deduct expenses.
  • Filing a compulsory return late, which triggers a penalty.
  • Relying on unlicensed intermediaries promising huge refunds.

Cultural tips

  • Register in ELSTER weeks before the filing season since the activation letter takes time.
  • Photograph receipts with your phone and sort them into a folder per year.
  • Ask a tax aid association about the membership fee if your case is simple.
  • When you marry, have a child or change jobs, review your tax class.
  • If the office sends you a request for clarification, answer within the stated deadline with the requested receipts, since a quick reply prevents a flat-rate estimate.

Official links

Check yourself

Question 1 of 5

What is the Steuer-ID?