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Wage tax class determination

Last activity 02 August 2021 by Dehitman

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82parsifal

Hi there to all,

I am Brian and I am relocating with my family to North Rhine-Westphalia. At the moment only my wife has signed an ended open contract in Germany, while I plan to study and not working for the next year. We have two minor children and no church registered nor any additional allowance.

I was looking at some forums in order to determine the wage tax class my wife is under. At the current conditions it seems that she is under Class III as per German tax regimes and applicable conditions- but  I was reading that the employer shall apply initially for Class VI, until the tax number is confirmed to the employer. 

Since I am not sure on this, I am asking for some clearance on the following: (1) who shall determine the wage salary tax- Finanzamt or it is by self declaration? (2) what is the exact procedure to be followed? (3) in case Finanzamt and employer wrongly determine a different Class which does not corresponds to the current situation, what are the recommended steps to correct it- should employer follow this or my wife personally? How long does it take for the full procedure to be completed.

Apologise if being to detailed, but the current situation is so confusing now.

Any overview and information/concrete practical experience on the above is much appreciated,

Ciao,

beppi

German tax rules are incredibly complicated - and officially only certified tax consultants can advice on your personal situation (for fixed fees and with a warranty for correctness, which you will not get here).
And: The tax class does NOT determine how much tax you actually owe - that is calculated after the end of the year with your tax declaration - but only how much pre-payment is deducted monthly. Any over- or under-payment with be reimbursed or charged afterwards.
Now to your actual question:
- The employer has to assume tax class VI (the most unfavourable for you) until the tax authority assigns any other - which is usually quick.
- Married people can chose to be classified as III - V (with the higher earner usually III, as it has lower deductions) or IV - IV (usually if both earn around the same amount). You have to declare to the tax authority which one you want. A tax consultant can help you with this (and is advisable if you are not near-fluent in German).

82parsifal

Yes indeed, approach of a certified accountant should be the best solution.

Thank you for your valuable info though,

Best

prince_cleo

At the end of it all, you always pay the same amount of tax, regardless of the tax class. It's a matter of whether you want to pay a bit more regularly at the beginning, or pay more ie. one lump sum at the end. I prefer to get back my overpaid taxes at the end to avoid scary amounts that I have to pay later on, which is why I stick to the default class 4. You can get your taxes back when you do your yearly tax claim.

If at any point you want to change your tax class, you need to do it yourself at the Finanzamt. There are forms to fill for this purpose.

More info on tax classes here I found online: https://johnnyafrica.com/german-tax-class-and-how-to-change-it/https://johnnyafrica.com/german-tax-class-and-how-to-change-it/

Dehitman

Hi Brian

I can tell you what happened with me.  For the first payment I was put in tax class 1 as a single person, so the tax was very high. But after I contacted the tax office and received a confirmation from them of my married status (wife not working in Germany and children). I was switched to tax class 3. This is the lowest tax level as it accounts for you family.

Don't worry if your wife has another class  to start with, you will be able to claim any overpayments at the end of the tax year. For the first time I recommend a steuerberater (tax adviser) but after that you can do it yourself if your tax is not complicated

You may need to apply for kindergeld also.

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