Gross vs. net income (Brutto vs. Netto)
Brutto (gross) is the salary figure in your contract, before deductions. Netto (net) is what actually lands in your bank account, after Lohnsteuer (wage tax) and Sozialversicherung (social insurance) contributions are withheld. For a typical single employee in Germany, the gap between the two is commonly a third to two-fifths of gross pay (2026, approximate).
Why it matters
Job postings and employment contracts (Arbeitsvertrag) quote Brutto, because that's the figure used to calculate Sozialversicherung contributions and pension entitlements. Budgets, rent affordability, and savings targets have to run on Netto instead — that's the money that actually reaches the account each month.
The gap between the two comes from two deduction stacks: Lohnsteuer (wage tax), withheld progressively by the employer and passed to the Finanzamt (tax office), and Sozialversicherung (social insurance) contributions — pension, health, unemployment, and long-term care insurance, split between employee and employer.
Every downstream personal-finance calculation — savings rate, fixed-cost ratio, means-tested benefit eligibility, pension projections — starts from Netto, not Brutto. Converting correctly between the two is a prerequisite for nearly all of them.
Worked example
Take an illustrative single employee earning €4,000/month gross, Tax Class I (no children, not a member of a church), 2026. The deduction stack splits into wage tax and four social-insurance categories:
| Deduction | Category | Approx. rate — employee share (2026) | Approx. monthly amount |
|---|---|---|---|
| Rentenversicherung (pension insurance) | Social insurance | 9.3% [1] | €372 |
| Krankenversicherung (health insurance) | Social insurance | ~8.75% (7.3% base rate plus roughly half of the average 2.9% Zusatzbeitrag, additional contribution) [1] | €350 |
| Arbeitslosenversicherung (unemployment insurance) | Social insurance | 1.3% [1] | €52 |
| Pflegeversicherung (long-term care insurance, no children) | Social insurance | 2.4% [1] | €96 |
| Lohnsteuer (wage tax) | Income tax | Progressive; roughly 12-13% effective on gross at this income and Tax Class (varies by Steuerklasse) [2] | approx. €505 |
Total deductions land around €1,370/month, leaving Netto around €2,630 — roughly 66% of Brutto. Change the Tax Class, add children, or add church membership, and both the wage-tax line and the Pflegeversicherung line move; the social-insurance percentages themselves are fixed by law for the year.
This example is simplified — actual withholding depends on Steuerklasse (tax class), church membership, number of children, and income level.
Check yourself
An employee's Brutto (gross) salary is €3,000/month. Total deductions (Lohnsteuer plus Sozialversicherung) take 35% of gross. What is the Netto (net) amount, in euros?
Brutto (gross) is €4,500/month. Sozialversicherung (social insurance) contributions take 21% of gross. How many euros are withheld for social insurance that month?
Which of the following belongs to the Sozialversicherung (social insurance) deduction stack, rather than being a tax?
Which of the following are part of the Sozialversicherung (social insurance) contributions deducted between Brutto and Netto? Select all that apply.
Sources
-
Techniker Krankenkasse (TK) — Aktuelle Beitragssätze in der Sozialversicherung 2026, https://www.tk.de/firmenkunden/versicherung/beitraege-faq/beitragssaetze/aktuelle-beitragssaetze-in-der-sozialversicherung-2031554 (2026)
-
Bundesministerium der Finanzen — Das ändert sich 2026 (income tax rates, basic allowance), https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Steuern/das-aendert-sich-2026.html (2026)