Tax Classes (Steuerklassen)

Tax class (Steuerklasse) determines the monthly tax withholding from salary. Class choice for couples affects calculation of Elterngeld (parental allowance), Arbeitslosengeld I (unemployment benefit), and Krankengeld (sick pay), as these benefits are calculated from net salary [1].

Class Affects Withholding, Not Final Tax

This Is Not the Tax Amount

Steuerklasse only affects tax withholding from salary. The final tax amount for the year is the same regardless of class [2]. The difference is equalized when filing a return (Steuererklärung).

Class affects cash flow (when money is in your pocket), but not total annual tax burden.

Classes

Germany has six tax classes [3]:

Class	For Whom	Features
I	Single, divorced, widowed	Standard deductions for one person
II	Single parents	Additional deduction Entlastungsbetrag — €4,260 per year (2024) [4]
III	Married with non-working spouse or spouse in class V	Low withholding, two basic tax-free minimums
IV	Married with working spouse (both in IV)	Standard withholding for each
V	Married, if spouse is in class III	High withholding, compensated by spouse's class III
VI	For second job	Maximum withholding, no tax-free minimum

Combinations for Couples

Spouses can choose one of three tax class combinations [5]:

Combination	When Suitable	Withholding Distribution
IV / IV	Roughly equal incomes (difference up to 20%)	Each pays proportional to their income
III / V	One earns significantly more (difference 40%+)	More net for partner in class III, less for partner in V
IV / IV with Faktor	Any income difference	Withholding precisely matches final tax, minimal extra payments/refunds when filing

Effect on Benefits

Some benefits are calculated from net salary [1]:

• Elterngeld (parental allowance)
• Arbeitslosengeld I (unemployment benefit)
• Krankengeld (sick pay)

Tax class affects net salary amount, and therefore the amount of these benefits.

Situation	Class Choice Factors	Timeline
Planning a child, both work	Class III for person going on parental leave — increases calculation net	Change minimum 7 months before birth [6]
Risk of job loss	Class III gives higher calculation net for ALG I	Change possible during year [5]

Calculation Example

With gross salary €3,500, the difference between class III and class V can be around €300-400 net per month. Over 12 months of Elterngeld calculation period, this affects the benefit base. Specific difference depends on salary, number of children, and other factors [1].

Psychological Moment: Spouse's Work in Class V

If one partner works in class V, their net is around 55% of gross.

Common reaction: "no point in working, everything goes to taxes."

Mechanics:

• This is withholding, not final tax. When filing a return, overpayment is returned [2]
• Annual household tax burden is the same regardless of class choice
• Class V affects money distribution during the year, not total amount

Over 10 years, a working spouse at gross €2,500 per month brings the family around €180,000-220,000 additional income after taxes (calculation depends on specific tax situation).

This is not only a financial decision — there are questions of identity, roles, adaptation. Math shows one thing, emotional reality may be different. Both parts matter.

How to Change Class

1. Submit application to Finanzamt — form "Antrag auf Steuerklassenwechsel bei Ehegatten" [5]
2. Since 2020 can change class multiple times per year (previously limited to once) [5]
3. Change takes effect from following month after submission
4. Online: through ELSTER portal with electronic certificate or BundID [5]
5. Employer receives information automatically through ELStAM system (electronic tax data)

What to Do

1. Check current class — shown on payslip (Gehaltsabrechnung)
2. Assess situation: planning a child? Risk of job loss? Income difference?
3. Change class in advance if benefits are planned — minimum 7 months before parental leave starts [6]

FAQ

Not legal or financial advice.

We earn roughly the same. Is there any benefit to switching from IV/IV to III/V?

With equal incomes, the III/V combination provides no tax advantage — the total annual tax is the same regardless of combination [2]. Moreover, III/V creates a mandatory filing obligation (Pflichtveranlagung), while IV/IV does not. The only scenario where III/V benefits couples with equal incomes: one partner plans to go on parental leave (Elterngeld is calculated from net income). Alternative — IV/IV with Faktor: withholdings precisely match the final tax, avoiding large additional payments or refunds when filing.

I switched to class III for Elterngeld, but my spouse's class V paycheck dropped dramatically. Is this normal?

Yes. In class V, withholdings are ~45% of gross (instead of ~30% in class IV). This looks like income loss, but the family's total annual tax is identical — the difference is returned when filing Steuererklärung. At a gross salary of €3,000 for the spouse, the loss is ~€400–500 net per month, but the family gets this back in the annual reconciliation. For budget planning: treat the expected refund as "virtual income" that arrives after filing.

I have a Minijob alongside my main job. What tax class applies to the Minijob?

A Minijob up to €538/month (since 2024) is taxed at a flat 2% rate paid by the employer — tax class does not apply [3]. If the second job exceeds the Minijob limit, it automatically falls into class VI (maximum withholding, no tax-free allowance). Class VI applies to any additional employment income beyond your primary job. When filing an annual return, overpayment from class VI is refunded.

We registered a civil partnership (eingetragene Lebenspartnerschaft). Same options as married couples?

Since the Bundesverfassungsgericht (Federal Constitutional Court) ruling in 2013, registered partnerships — and since 2017 Ehe für alle (marriage for all) — have full access to all tax class combinations: III/V, IV/IV, IV/IV with Faktor, as well as joint filing (Zusammenveranlagung) [3]. The mechanics of class selection and switching are identical to married couples.

I started work in September. Can I still change my tax class this year?

Yes. Since 2020, class changes are possible at any time and an unlimited number of times per year [5]. The change takes effect from the month following the application. For new employees: class I is assigned automatically if you are single. Switching to another class (e.g., III with a working spouse) can be advantageous if you plan to file a return — withholdings for the remaining months will be lower, and less money will be "stuck" with the government until refund.

Sources

1. Bundesministerium für Familie, Senioren, Frauen und Jugend — Elterngeld und Elternzeit. Official guidance on Elterngeld calculation. https://www.bmfsfj.de/elterngeld (2024)

2. Bundesministerium der Finanzen — Merkblatt zur Steuerklassenwahl. Explanation of tax class effect on withholding and annual tax burden. https://www.bundesfinanzministerium.de/steuerklassen (2024)

3. § 38b Einkommensteuergesetz (EStG) — Lohnsteuerklassen, Zahl der Kinderfreibeträge. Official law text on tax classes. https://www.gesetze-im-internet.de/estg/__38b.html (current version)

4. § 24b Einkommensteuergesetz (EStG) — Entlastungsbetrag für Alleinerziehende. Law on deduction for single parents. https://www.gesetze-im-internet.de/estg/__24b.html (current version)

5. Bundesagentur für Arbeit — Merkblatt Steuerklassenwahl. Labor agency recommendations on tax class choice. https://www.arbeitsagentur.de/steuerklasse (2024)

6. § 2b Bundeselterngeld- und Elternzeitgesetz (BEEG) — Bemessungszeitraum und Bemessungsgrundlage. Law on calculation period for Elterngeld (12 months before child's birth). https://www.gesetze-im-internet.de/beeg/__2b.html (current version)