How much is personal income tax in Germany?

Personal income tax in Germany are applied according to tax brackets with tax rates ranging from 0% to 45%, depending on income and personal status. In addition to payroll tax, employees can also take advantage of deductions to optimize income. Let's SHD Academy Explore the tax system in Germany, helping you proactively plan your finances when living and working in this country.

>> Reference: 

• Does studying in Germany need financial proof?
• Latest information on German vocational training contracts and things to know

What is personal income tax in Germany? 

Personal income tax in Germany is called Einkommensteuer. This is a tax levied directly on the personal income of German citizens. Taxable income includes income from wages, interest, bonuses, pensions, income from real estate securities and other income.

What is the percentage of personal income tax in Germany? According to German tax law, personal income tax rates in Germany are calculated according to taxable income and have different tax rates. Currently, personal income tax rates in Germany ranges from 14% to 42% and is calculated on gradually increasing taxable income. The starting point of each tax bracket is called a “tax band” and incomes within each bracket are taxed at the corresponding rate. In addition, deductions are taken into account to reduce the amount of tax payable.

On average, a single person in Germany, after deducting all taxes, social insurance, pension insurance, etc., receives only 58% in total salary. However, for families with children, on average, each couple will keep 87% of their total salary.

>> Reference: Is learning German difficult? How long does it take to achieve a certificate B1

Payroll tax

Salary tax is part of personal income tax in Germany. The applicable tax rate will be calculated directly based on each individual's annual income, specifically:

• 0% tax: Applicable to people with income below 9,408 Euro/year.
• 14% – 42% tax: Applies to people with incomes between 9,409 Euros and 57,051 Euros per year, with tax rates increasing according to income level.
• 42% tax: Applicable to people with income from 57,052 Euro to 270,500 Euro/year.
• 45% tax: Applicable to people with income over 270,500 Euro/year.

>> Reference: Instructions for the discount of German vocational training 2025

Tax deductions in Germany

To ease the tax burden, the German tax system offers many deductions to taxpayers, including:

• Personal deduction (Grundfreibetrag): Each individual is exempt from tax on a certain amount of income, known as the basic deduction. Currently, the minimum deduction is 9,744 Euros/year.
• Kinderfreibetrag (Deduction for dependents): Applies to people who are responsible for supporting relatives such as children. The deduction for each dependent is 5,172 Euro/year.
• Insurance expense deductions (Versorgungs Pauschale): Contributions to health insurance in Germany, pensions and other social insurance may be tax deductible.
• Deduct work-related expenses: Includes travel expenses, training, work tools and other expenses directly related to the job.
• Special expense deductions: Such as educational expenses, special medical care expenses or charitable contributions.

Applying these deductions helps reduce the amount of tax payable and assists taxpayers in managing their personal finances.

>> Reference: Total cost of vocational study in Germany latest 2025

Tax levels in Germany

The German personal income tax system is divided into six levels, based on the employee's marital status and family circumstances. Normally, the tax authorities will automatically assign the appropriate tax level, but the employee can still request an adjustment if necessary. Below are the six tax levels in Germany according to German tax law:

• Level I: Applicable to single, divorced, widowed or spouse not residing in Germany.
• Level II: For single parents with young children who are eligible for child support.
• Level III: Applicable to married people where only one person has income or one person has low income and the other is in level V.
• Level IV: For couples with equal income and no children.
• Level V: Applies when one person in a marriage is in class III, the other will be in class V with a higher tax rate.
• Level VI: For people with more than one job, applicable from the second job onwards, with a higher tax rate than other levels.

Choosing the right tax bracket will directly affect the amount of salary received and tax obligations to be paid. Therefore, employees need to consider carefully or consult experts to ensure the best financial benefits.

>> Reference: Things to know about blocked accounts for vocational study in Germany

Vocational study in Germany with SHD Academy – Why not?

In the context of international integration, the demand for high-quality human resources is increasing. Choosing a reputable training and career orientation unit not only helps students access quality job opportunities but also ensures a sustainable development path. SHD Academy is proud to be a pioneer in the field of vocational training and connecting Vietnamese human resources with the German labor market. With the mission of accompanying students from the preparation stage German vocational study profile until they have settled into their careers, SHD Academy offers comprehensive solutions, including specialized training, financial support, job connections, and cultural integration guidance. Here are four core strengths that make SHD Academy the top choice for young people who want to develop a solid career in Germany:

1. Connecting cooperation

• SHD Academy builds close cooperative relationships with local authorities in Vietnam, representatives of German states, leading educational institutions and businesses in Germany. From there, it not only opens up attractive job opportunities with guaranteed output for students but also commits to full benefits of accommodation, support for administrative procedures and necessary conditions, helping students feel secure in studying and developing a long-term career in Germany. 
• Thanks to a network of partners with more than 40 German enterprises and constantly expanding, SHD Academy confidently commits to providing students with jobs immediately after graduation with attractive income, helping young people confidently enter the international labor market and develop their future careers.
• Honored to be recognized by the Department of Education and Training of Ho Chi Minh City as an excellent non-public educational institution for two consecutive school years (2022-2023 and 2023-2024), affirming top quality service.
• In addition, SHD Academy is the pioneer in bringing Vietnamese leaders to Germany to visit and work, demonstrating the care and concern of local leaders and SHD team for young human resources, strongly affirming the commitment to comprehensively accompany students from Vietnam to Germany. At the same time, affirming SHD's leading reputation in connecting international cooperation. 

2. Pioneer in financial support

• SHD Academy is proud to be a pioneer in providing practical financial solutions for students. By officially signing a cooperation agreement with Shinhan Bank to implement the "Companionship Tuition" program, SHD Academy opens up opportunities to help students access preferential loans more easily.
• In addition, thanks to close coordination with the authorities of the Mekong Delta provinces, SHD Academy has implemented financial loan packages from 150 to 200 million VND through the Bank for Agriculture and Rural Development (Agribank) and reputable credit institutions such as the Social Policy Bank to support students in provinces such as An Giang, Tra Vinh, Ben Tre, Soc Trang.
• This solution not only helps reduce the financial burden for parents and students but also opens up opportunities for students to realize their dream of studying vocational training in Germany.

3. Comprehensive ecosystem

• Comprehensive ecosystem with German language training services, TELC test coordination, career orientation, interview training with businesses, visa interviews and legal support for students until graduation and stable jobs in Germany. 
• Transparent design process with clear costs, close connection between services, helping students have a seamless, uninterrupted learning and working experience.
• SHD Academy is committed to accompanying students on their journey to conquer their career goals, helping young people easily integrate into the international environment and build a sustainable career in Germany.

4. Personalize your learning and career path

• SHD Academy provides vocational training courses, helping students gain practical experience and discover themselves. Through this, students will recognize their strengths and identify fields that match their passion, thereby strengthening their choice of suitable majors.
• Based on individual abilities and labor market trends in Germany, SHD Academy orients and advises on personalized learning paths for each student. Thereby, students are supported to maximize their strengths, while meeting the human resource needs of the international market.
• Understanding that “integration” is the key to success, SHD organizes exchange sessions and activities to explore German culture, from customs, cuisine to daily life skills. These experiences not only help students get acquainted with the new environment but also understand how to communicate and work with Germans. Thanks to that, students feel more confident when entering life in Germany, ready to build a long-term career in a promising international environment.
• Up to now, more than 99% students of SHD Academy have successfully integrated in Germany, quickly adapted and demonstrated the ability to study and work effectively, receiving high appreciation from businesses. This once again affirms the outstanding quality in consulting, career orientation and cultural and skill preparation for students of SHD Academy.

>> Reference: TOP 10 most prestigious German vocational study centers today

Above is information about personal income tax in Germany Hope to help you understand how to calculate taxes and deductions to manage finances effectively, avoid paying excess taxes and minimize legal risks when vocational training in Germany and live here. If you have any related questions, please contact us immediately. SHD Academy Call hotline 0336 760 276 for detailed advice and support!