Tax Classes Explained

What are Tax Classes and Why are They Important?

The tax class determines how much wage tax your employer withholds monthly from your gross salary and pays to the tax office. In Germany, there are six tax classes (I to VI), which depend on marital status and employment situation.

Important to know: The tax class only affects the monthly wage tax deduction, not the actual annual tax liability. In the income tax return, the actual tax owed is calculated - overpaid wage tax is refunded, underpaid tax is claimed.

Tax Class I - For Singles and Divorced

Tax Class I is the standard tax class for:

• Singles without children
• Divorced persons
• Widowed (from the second year after the partner's death)
• Permanently separated persons

In this tax class, the normal allowances are considered, including the basic allowance of €12,096 (2026) and the employee flat-rate allowance of €1,230.

Tax Class II - For Single Parents

Tax Class II is specifically designed for single parents and offers an additional tax advantage:

• At least one child must live in the household
• The child must be registered with the single parent
• No other adult person may live in the household

The big advantage: The relief amount for single parents in 2026 is:

• €4,260 for the first child
• + €240 for each additional child

This leads to a noticeably higher net salary compared to Tax Class I.

Tax Class III - For Married Couples with Income Difference

Tax Class III is for married employees whose partner:

• Is not employed, or
• Earns significantly less and chooses Tax Class V

This tax class offers the lowest monthly deductions, as virtually double the basic allowance (splitting method) is already considered in the monthly wage tax deduction.

Tax Class IV - For Married Couples with Similar Income

Tax Class IV is for married couples where:

• Both partners are employed
• Both have a similar income level

The wage tax deductions correspond approximately to those of Tax Class I. The advantage: There are usually no large back payments or refunds in the tax return.

Tax Class IV with Factor

Since 2010, there is also the option to choose Tax Class IV with factor method. Here, the splitting advantage is already distributed between both partners, leading to more accurate monthly taxation.

Tax Class V - Partner of Tax Class III

Tax Class V is only possible in combination with Tax Class III. The partner with the lower income chooses this class.

Important: In Tax Class V, monthly deductions are highest, as no basic allowance is considered. This is completely attributed to the partner in Tax Class III.

Tax Class VI - For Second or Side Jobs

Tax Class VI automatically applies to:

• The second (and each additional) employment relationship
• Side jobs alongside the main employment

In this tax class, no allowances are considered - the tax burden is therefore highest. Wage tax is deducted from the first euro.

Changing Tax Class - When and How?

A change of tax class is possible with:

• Marriage: Automatic change to IV/IV, switch to III/V possible
• Divorce/Separation: Change back to Tax Class I
• Birth of a child: For single parents, change to Tax Class II possible
• Income changes: Possible once a year at any time

The application is made at the responsible tax office or electronically via ELSTER.

Comparison: Tax Class Overview 2026