How much will an employee in Germany cost me?
Simply fill in the salary (monthly or yearly). Ignore the other entries. Press calculate. This gives you a pretty good estimate of what you would pay as an employer.
As an employee, in order to see what net pay you would get, you need the other information asked for.
In addition there is the Workman’s Compensation Insurance (for accidents that occur during working hours). This insurance is highly individual and can therefore not be calculated by this standard calculator. Please contact us for further information.
Some of the insurances and the income taxes depend on individual circumstances. Please understand that this calculator is a close approximation but not an exact figure.
The different Tax Categories of the German Wage Tax system
The German Wage Tax System differentiates between 6 Tax Categories, depending to the circumstances of the employee.
Tax Category I: Single, separated or widowed who don’t fall into the category II or III.
Tax Category II: Single or separated people living with their child, who are entitled to a child’s allowance.
Tax Category III: For people who are married, husband and wife are living together. Very interesting for people who are married and one of them has a high income while the other one has no or low income. Ideally, the person with the low income will have Tax Category V and the other Tax Category III.
Tax Category IV : For people who are married, husband and wife are living together. Ideal for married employees where both receive similar wages. Both will then have Tax Category IV.
Tax Category V : For people who are married, husband and wife are living together. One of them has a Tax Card of Category III (for more information refer to Tax Category III).
Tax Category VI : For employees who have more than one employer. Receiving wages from two or more employers will require a seperate tax card for each employer as all the wages will be taxed. Ideally the employment with the lower income will get Tax Category VI.
Who will have to pay Church Tax
Employees who are a member of a registered church (Catholic, Protestant etc.) will have to pay church tax. The church tax rate is dependent on which state the employee lives in. In most cases the rate is 9 % of the Wage Tax.
Social insurance contributions in Germany
The Social Insurance Contributions are generally paid half by the employee and half by the employer. These contributions are obligatory but are limited to a maximum fee. They contain the following contributions:
Pension Insurance: 19.6 % of the gross wage will be paid by the employee and by the employer together, half and half.
Unemployment Insurance: 3.0% of the gross wage; half will be paid by the employee and half by the employer.
Health insurance: 15.5% of the gross wage. 7,3% will be paid by the employer and 8,22% by the employee. If the salary of an employee is higher than a specific limit of 57,600 € (2017), the employee will be able to change to a private health insurance. If his salary is below this limit, the employee is insured by the public health insurance.
Health Insurance add on fee: The Health insurance add on fee is mostly 0.9 %. The employee himself has to take care of this fee. The fee can vary, depending on the insurance company. See below the Health insurance add on fees of the 20 biggest health insurance companies:
- AOK Bayern: 0,9%
- AOK Baden-Würtemberg: 0,9%
- AOK Hessen: 0,9%
- AOK Niedersachsen: 0,8%
- AOK Nordost: 0,9%
- AOK Nordwest: 0,9%
- AOK Plus: 0,3%
- AOK Rheinland-Pfalz/Saarland: 0,9%
- AOK Rheinland/Hamburg: 0,9%
- Bahn BKK: 0,9%
- Barmer GK: 0,9%
- BKK Mobil Oil: 0,8%
- DAK-Gesundheit: 0,9%
- Deutsche BKK: 0,9%
- IKK Classic: 0,8%
- IKK Südwest: 1,2%
- KKH Kaufmännische Krankenkasse: 0,9%
- Knappschaft: 0,8%
- SBK – Siemens BKK: 0,9%
- Techniker Krankenkasse: 0,8%
Long term disability: 1.95% of the gross wage; half will be paid by the employee and half by the employer. The amount of long term disability insurance will be reduced for employees who have a child.
An employee with a yearly income of 9,168,- € (2019) doesn’t have to pay income tax, for married employees the limit is 18,336,- € (2019).
Talk to us about hiring an employee in Germany
We can guide you through the necessary steps to employing people in Germany and offer help and guidance along the way