An explanation of the main parts of your salary statement.

A German salary statement.

0 - The salary may be made up of various components.

a  - This field is where you will see your total gross earnings.

b  - Here you will see the amount of income tax that is deducted from your gross salary.

c  - If you are a member of a specific church, you will pay church tax in Germany. Churches use this money to fund charitable causes, for instance. The amount deducted depends on your salary and also varies from state to state.

d  - The total amount of tax deductions.

e  - This is the amount you pay for your health insurance. The contribution rates for statutory health insur- ance are based on the gross monthly salary. Part of the insurance contribution is paid by the employer and you pay the other as the employee. There is also an additional contribution set by each individual insurance fund. Since 2019, its cost has been split equally between the employer and employee.

f  - This is your monthly pension contribution. In 2024, it was 18.6 per cent of an employee’s earned income. The employer and employee each pay half, in other words, 9.3 per cent.

g  - This is your unemployment insurance contribution. This protects you and provides unemployment benefits if you lose your job. Your monthly contribution is 2.6 per cent. Here, too, your employer pays the other half of the total of 5.2 per cent.

h  - Should you require care, you will need financial support. This is provided by the long-term care insurance. The contribution rate is currently 3.4 per cent. Again, these contributions are shared between employer and employee. Members over the age of 23 with no children pay a long-term care insurance supplement, which is currently 0.35 per cent.

i  - The total amount of all social security deductions.

j  - Your exact net monthly salary after all deductions.

Lohnsteuerklassen – what are they?

In general, the amount of income tax you pay depends on your salary. If you earn more, you pay more tax. In Germany, there are several income tax brackets or wage tax classifications and as an employee, you will be assigned to one of them by the tax authorities. There is a total of six different tax brackets, which are primarily based on your marital status. If you are single, for example, you will automatically be assigned to tax bracket 1.

Tip: Would you like to learn more about other tax brackets in Germany? More info here.