From Gross to Net Salary - The Complete Explanation
Many employees ask: How much of my salary is actually left? The calculation of net salary follows a fixed scheme, which we explain step by step here.
On average, employees keep about 60-70% of their gross salary as net. The exact percentage depends on your tax class, income, and other personal factors.
The Basic Formula
Net = Gross - Social Contributions - Wage Tax - Church Tax - Solidarity Surcharge
Step 1: Gross Salary as Starting Point
The gross salary is your agreed salary before all deductions. It's stated in your employment contract and serves as the calculation basis for all further deductions.
Important distinction:
- Monthly Gross: Your regular monthly salary
- Annual Gross: Monthly gross × 12 + special payments (vacation/Christmas bonus)
Step 2: Calculation of Social Insurance Contributions
From the gross salary, social contributions are calculated first. These amount to in 2026 for employees:
| Insurance | Employee Share |
|---|---|
| Pension Insurance | 9.3% |
| Health Insurance | 7.3% + additional |
| Care Insurance | 1.7% (+0.6%)* |
| Unemployment Insurance | 1.3% |
| Total (approx.) | ~21% |
* Surcharge for childless persons from age 23
More Details: Read our comprehensive guide on Social Contributions 2026 with all contribution rates and assessment ceilings.
Step 3: Determining Taxable Income
For wage tax calculation, the taxable income is determined. Various allowances are deducted from the gross salary:
- Basic Allowance 2026: €12,096 per year
- Employee Flat-Rate Allowance: €1,230 per year
- Special Expenses Flat-Rate: €36 per year
- Insurance Allowance: Depending on income
With certain tax classes, additional allowances apply, e.g., the relief amount for single parents (Tax Class II) or double basic allowance for Tax Class III (spouse splitting).
Step 4: Calculation of Wage Tax
Wage tax is calculated according to the official tax formulas of the Federal Ministry of Finance (§ 32a German Income Tax Act - EStG). The tax rate is progressive - the higher the income, the higher the tax rate.
Tax Rate 2026
| Taxable Income | Tax Rate |
|---|---|
| €0 - €12,096 | 0% |
| €12,097 - €17,443 | 14% - 24% |
| €17,444 - €68,480 | 24% - 42% |
| €68,481 - €277,825 | 42% |
| from €277,826 | 45% |
Important: The tax rate only applies to the portion of income in the respective bracket. An annual income of €50,000 doesn't mean you pay 42% taxes!
Step 5: Church Tax and Solidarity Surcharge
Church Tax
If you are a member of a church, church tax is additionally levied:
- Bavaria and Baden-Württemberg: 8% of wage tax
- All other federal states: 9% of wage tax
Solidarity Surcharge
The solidarity surcharge (5.5% of wage tax) was largely abolished in 2021. It only applies to:
- Wage tax over €18,130 per year (single assessment)
- Wage tax over €36,260 per year (joint assessment)
This only affects approximately the top 10% of income earners.
Example Calculation: €4,000 Gross
Here's how net salary is calculated at €4,000 gross (Tax Class I, no children, church tax 9%):
| Gross Salary | €4,000.00 |
| - Pension Insurance (9.3%) | - €372.00 |
| - Health Insurance (7.3% + 1.45%) | - €350.00 |
| - Care Insurance (2.3%) | - €92.00 |
| - Unemployment Insurance (1.3%) | - €52.00 |
| - Wage Tax | - €464.00 |
| - Church Tax (9%) | - €41.76 |
| = Net Salary | €2,628.24 |
This corresponds to approximately 65.7% of gross salary.
Related Guides
- Tax Classes Explained - All 6 tax classes in detail
- Social Contributions 2026 - All contribution rates at a glance
- Salary Negotiation Tips