Tax Identification Number and Tax Classes in Germany

What is the Tax Identification Number (Steueridentifikationsnummer) in Germany?

The tax identification number (Steueridentifikationsnummer or IdNr for short), which forms the basis of your financial transactions in Germany, is a unique 11-digit identification number automatically assigned at your birth and valid for life. This number is mandatory in many areas, from your employer preparing your payslip to you filling out your annual tax return, from your bank transactions to applying for various social benefits.

How Can You Find Your Tax Identification Number?

Your tax identification number is sent to your address by mail after you complete your registration in Germany (Anmeldung). You can also find this number on your annual income tax statement (Lohnsteuerbescheinigung) or your tax assessment notice (Steuerbescheid). If you don’t have these documents or have forgotten your number, you can request your tax identification number by filling out a special form on the website of the Federal Central Tax Office (Bundeszentralamt für Steuern).

Tax Classes (Steuerklassen) in Germany

The German tax system has six different tax classes (Steuerklassen), taking into account your marital status and whether you have children. These tax classes directly affect the amount of income tax deducted from your salary. Being in the correct tax class is important for optimizing your net salary.

Here are the six tax classes in Germany:

• Tax Class I: Applies to single, divorced, separated, or widowed employees. If you are not married and have no children, you are most likely in this class.
• Tax Class II: Covers single parents living with their child and receiving child benefits (Kindergeld) or a child tax exemption (Kinderfreibetrag). However, for this class, you must not be living in the same household with another adult. To switch to this class, you usually need to fill out the “Antrag auf Lohnsteuer-Ermäßigung” form.
• Tax Class III: In married couples where one spouse is not working or earns very little, the higher-earning spouse can switch to this class. It is also valid for individuals who have lost their spouse, for the year of death and the following year. In this case, the other spouse is automatically assigned to Tax Class V. This combination can result in less overall tax paid.
• Tax Class IV: This is the default class for married couples. You are automatically assigned to this class when you get married. It is ideal when both spouses earn similar levels of income.
• Tax Class V: If one spouse is in Tax Class III, the other spouse goes into this class. It is generally suitable for the lower-earning spouse.
• Tax Class VI: You fall into this class if you have a secondary job in addition to your main job. This class provides for higher tax deductions from your additional income.

Average Net Income for Someone with a 3000 Euro Gross Salary in Different Tax Classes:

• Tax Class 1: 2050 Euro
• Tax Class 2: 2150 Euro
• Tax Class 3: 2310 Euro
• Tax Class 4: 2050 Euro
• Tax Class 5: 1720 Euro
• Tax Class 6: 1680 Euro

How to Change Your Tax Class?

It’s possible to change your tax class. Marriage, divorce, having children, or significant changes in your income level may necessitate this change. Married couples can choose between Tax Class III/V or IV/IV combinations to pay less overall tax. To change your tax class, you need to apply to your local Tax Office (Finanzamt). Generally, you have the right to make a change once a year. It’s advisable to seek support from a tax advisor to determine the most suitable class combination for you.