How it's calculated
German payroll takes two kinds of deductions from your gross salary (Bruttogehalt) each month. What is left is your net salary (Nettogehalt).
- Wage tax (Lohnsteuer). Your employer withholds income tax every month using the official payroll program of the Federal Ministry of Finance, the Programmablaufplan (PAP) 2026. The calculator runs a line-by-line copy of that program and reproduces the ministry's own test results to the cent. It projects your monthly pay to a year and deducts the employee allowance of €1,230, the special expenses allowance of €36 and a flat allowance for your social insurance (the Vorsorgepauschale). It then applies the income tax tariff for your tax class (Steuerklasse) and takes one twelfth.BMF
- Solidarity surcharge (Solidaritätszuschlag). This is 5.5% of the wage tax, but only once the annual wage tax after child allowances passes €20,350 (€40,700 in class III). Just above that threshold it is capped at 11.9% of the excess.Gesetze im Internet
- Church tax (Kirchensteuer). Only for members of a church that levies it: 8% of the wage tax in Bavaria and Baden-Württemberg and 9% in the other states. Like the surcharge, it is based on the tax after child allowances.BMF
- Social insurance (Sozialversicherung). You and your employer each pay half of pension insurance (18.6% in total), unemployment insurance (2.6%) and health insurance (14.6% plus your fund's add-on, on average 2.9% in 2026). Long-term care insurance is 3.6%, split in half too. Childless employees aged 23 or over add 0.6%, and parents pay 0.25% less for each child from the second to the fifth while the children are under 25.Deutsche Rentenversicherung Knappschaft-Bahn-See
The formula
- Monthly gross = annual salary ÷ 12.
- Wage tax = PAP 2026 for a monthly pay period: annual taxable amount = 12 × monthly gross − allowances − Vorsorgepauschale. The tax uses the basic tariff in classes I, II and IV, the splitting tariff in class III, and a special formula in classes V and VI. The monthly figure is one twelfth, with fractions of a cent dropped.
- Vorsorgepauschale = half the pension contribution, plus your health and care contributions at the reduced health rate. Unemployment insurance counts only while health, care and unemployment together stay under €1,900.
- Solidarity surcharge = min(5.5% × tax base, 11.9% × (tax base − threshold)), where the tax base is the wage tax after child allowances.
- Church tax = rate × tax base.
- Social insurance = your rate × pay up to the ceiling: €8,450 a month for pension and unemployment, €5,812.50 for health and care. Each contribution is rounded to the cent.
- Net pay = gross − wage tax − solidarity surcharge − church tax − social insurance. The year is 12 × the month.
In Saxony employees bear 1% of the care contribution alone and the rest is split in half, so employees pay more and employers less than elsewhere. Between €603 and €2,000 a month (the Midijob transition range), your contributions are charged on a reduced base.Deutsche Rentenversicherung
Worked example
A single employee in Berlin, tax class I, no children, not a church member, on €60,000 a year:
| Line | Year | Month |
|---|---|---|
| Gross pay | €60,000.00 | €5,000.00 |
| Wage tax (Lohnsteuer) | €9,388.92 | €782.41 |
| Pension insurance | €5,580.00 | €465.00 |
| Unemployment insurance | €780.00 | €65.00 |
| Health insurance | €5,250.00 | €437.50 |
| Long-term care insurance | €1,440.00 | €120.00 |
| Net pay | €37,561.08 | €3,130.09 |
That leaves €3,130.09 a month. As a church member in Bavaria the same salary nets €3,067.50. A married employee in class III with two children nets €3,542.17, while the same salary in class V nets €2,632.17. Married couples settle the difference between III/V and IV/IV in their joint tax return.
Assumptions and limitations
- Regular monthly salary, full year, statutory insurance. The calculator assumes 12 equal monthly payments, public health insurance and compulsory pension and unemployment insurance. Private health insurance, civil servants (Beamte) and self-employed people are not covered.
- Children. In tax classes I–IV each child under 25 counts as one child allowance (Kinderfreibetrag) on your tax card. That lowers the solidarity surcharge and church tax, not the wage tax. Child benefit (Kindergeld) is paid separately by the family office and is not included.
- Not included: bonuses and other one-off payments, a 13th salary paid separately, company car and other benefits in kind, employer pension contributions (bAV), tax-free allowances on your tax card, the factor method for class IV, and church tax caps or minimum amounts. The ministry's own calculator leaves these church tax special rules out as well.
- Minijobs. At €603 a month or less the job is a Minijob. The calculator then assumes the employer pays the flat tax and you pay only the pension top-up of 3.6%.
- Wage tax is a prepayment. Your final income tax is set by the tax office (Finanzamt) after the year, for example when you file a return. Use the income tax calculator to estimate it.