German Tax Classes I–VI Explained: What Newcomers Need to Know
Every employee in Germany is assigned a tax class (Lohnsteuerklasse, or Steuerklasse) that determines how much income tax your employer withholds from your monthly paycheck. There are six classes, numbered I through VI, assigned by the tax office (Finanzamt) based on your marital status and number of jobs. Understanding them matters because the wrong class can shrink your monthly take-home pay for months — even though the class only affects withholding, not your final tax bill.
The critical concept: withholding is not your final tax
Your tax class controls the Lohnsteuer (wage tax) your employer deducts each month as an advance payment toward your annual income tax. At the end of the year, your actual income tax is calculated on your total annual income — and the withheld amounts are credited against it. If too much was withheld, you get a refund when you file your tax return; if too little, you owe the difference.
So a "bad" tax class does not cost you money permanently — it costs you cash flow during the year. Still, for a newcomer budgeting in a new country, monthly cash flow matters a great deal.
What each class means
| Class | Who gets it | What it means in practice |
|---|---|---|
| I | Single, divorced, widowed, or married but permanently separated | The default for unmarried employees. Standard basic allowance applies. |
| II | Single parents | Like class I, plus an additional relief amount for single parents (Entlastungsbetrag für Alleinerziehende). You must apply — it is not automatic. |
| III | One spouse/partner in a marriage or registered civil partnership | Double the basic tax-free allowance of class I. Always paired with class V for the other partner. Best when one partner earns much more or the other does not work. |
| IV | Married/partnered, both earning | The default after marriage — couples are automatically placed in IV/IV. Each partner gets the standard basic allowance. Best when both earn similar amounts. |
| V | The spouse/partner of someone in class III | The mirror of III: no basic allowance of its own (it is "used up" in III), so withholding is high. Only ever chosen together with III. |
| VI | Second and subsequent jobs | Applies to income from a second (or third, etc.) employment. No allowances at all — the highest withholding rate. Your main job keeps its regular class. |
Key combinations for couples: III/V (one earns significantly more — maximises the higher earner's monthly net), IV/IV (similar incomes — the default and simplest), and IV/IV with factor (Faktorverfahren) — the most precise option, where the tax office calculates a personal factor so withholding matches the couple's combined tax as closely as possible, avoiding big refunds or back-payments.
What newcomers get by default
If you are single when you start working in Germany, you are automatically placed in tax class I — nothing to do, nothing to apply for. Your employer pulls your tax data electronically (ELStAM) using your tax ID, and class I applies.
If you are married (and your marriage is registered with the German authorities), you and your spouse are automatically placed in IV/IV — unless you actively choose III/V or IV/IV with factor. Note: a foreign marriage must be reported at the Bürgeramt (bring the marriage certificate, translated if necessary) for the tax office to know about it.
How to change your tax class
Changing is free, and since 2020 it can be done as often as you like during the year — the old once-a-year limit was abolished. The procedure:
- Married couples submit a joint application to their local Finanzamt. The form is the "Antrag auf Lohnsteuer-Ermäßigung und zu den Lohnsteuerabzugsmerkmalen" with the annex "Steuerklassenwechsel" — available from the Federal Tax Administration's form system or via Mein ELSTER online.
- Both spouses sign (a change from III/V to IV/IV can even be requested by one spouse alone).
- To take effect in the current calendar year, the application must generally reach the Finanzamt by 30 November of that year; it then usually applies from the following month.
The tax office issues a notice (Bescheid), and your employer picks up the new class automatically through the ELStAM system.
Which combination should a couple choose?
This is a cash-flow decision, not a total-tax decision — a married couple's combined annual tax is the same regardless of combination (assuming joint assessment), because the final bill is settled on the annual return.
- Similar incomes → stay in IV/IV. Simple, and monthly withholding roughly matches the final tax.
- One earns clearly more (roughly 60/40 or more skewed) → III/V. The higher earner keeps much more each month; the lower earner's paycheck shrinks. Good for monthly budgeting, but expect the annual return to even things out.
- Want precision → IV/IV with factor. The tax office computes an individual factor for each partner, so withholding tracks the real combined liability closely. The factor is valid for two years and must be re-applied for.
Warning for III/V couples: if the lower-earning partner later starts earning more than expected, the couple can end up owing tax at year-end — the annual return settles the difference either way.
Frequently asked questions
I'm single and just arrived. Do I need to do anything about my tax class?
No. You will automatically be in class I once your employer registers you with your tax ID. Just make sure you completed your Anmeldung so the tax ID is issued and mailed to you.
My spouse doesn't work. Should we switch to III/V?
Very likely yes — III gives the working partner double the basic allowance, which noticeably raises monthly net pay. File the joint application at your Finanzamt (or via ELSTER). It is free.
Does tax class affect my final tax bill?
No — not for married couples filing jointly, whose combined annual tax is determined by total income. The class only changes how much is withheld month by month. The annual tax return is where the true amount is settled.
I have a second part-time job. What class applies?
Your main job keeps its regular class (e.g. I); the second job is taxed under class VI, with no allowances — withholding is at the highest rate. The annual return reconciles everything.
I got married abroad. Does Germany know?
Only if you tell it. Register your marriage at the Bürgeramt with your (translated) marriage certificate so the tax office can place you in the correct class. Until then, you may be taxed as a single person in class I.
Sources
- German Federal Portal (Bundesportal), Applying for a change of tax class during marriage or civil partnership: https://verwaltung.bund.de/leistungsverzeichnis/EN/leistung/99102036011007/herausgeber/BB-109334873/region/12
- Finanzamt NRW, Lohnsteuerklassen (tax classes overview): https://www.finanzamt.nrw.de/steuerinfos/privatpersonen/arbeitnehmende/lohnsteuerklassen
- Amtsdeutschland, Change of tax class 2026: deadline 30 Nov, III/V & factor: https://amtsdeutschland.de/en/finanzamt/tax-class-change-for-married-couples/
This article is general information about German tax procedures, not tax advice. Tax class rules and allowances change — consult a licensed tax advisor (Steuerberater) for your personal situation.