Net Salary Calculation - Munich

Monthly wage


victgann
Hi all-

I know that this topic has been hammerred in other posts - but id like to get a definiye answer on this before i accept a job offer. Im an IT systems administrator (Wintel) with 4 years experience - the salary im being offered is 4,166 € per month, is that around average?

What does my net work out at? I would say that I am tax class 1.
If I use one of the calculators - the result is 2,600 approx per month,. does that look about right?

Also are health insurance and pension included in my deductions , i.e. is the €2,600 take home pay?

Thanks in advance.
long-haul
Wait a minute...

Go through this link and see if it answers your question. It's in plain simple English.
Gorgo
the average gross salary for regular computer-administration is 43900€/year in germany, so you probably know something other people don't or you're quite lucky
http://www.heise.de/ct/artikel/Wer-verdient-wie-viel-291472.html
victgann
Hi Long Haul - so what do i Put in the tax free allowance part? is €7,555 pretty much the standard?

thanks
long-haul
You put nothing or "0". See what works.

7,555€ Standard for what????
victgann
You put nothing or "0". See what works.

7,555€ Standard for what????

for a persons tax free allowance - the amount you earn tax free
long-haul
You put nothing or "0". See what works.7,555€ Standard for what???? for a persons tax free allowance - the amount you earn tax free
Errr??? I think you have got the whole thing wrong. If your annual income is equal to or below 7,555€, then you don't pay any tax. If your income is 10k, that means, you will be taxed for 10k. And if i am correct, income between 7,555 and 12,740 or something of that sort, then you have a single tax slab of 24% and incomes crossing that amount increase incrementally.

In your case. You do not have any tax free allowance.

cheers
long-haul
And for your better understanding,

Individual Income Taxes
In 2005/2006 an income of less than €7,664 is tax-free for a single person (€15,328 for a married couple). Incomes up to €52,151 for a single person (€104,302 for a couple) are then taxed with a rate progressively increasing from 15% to 42%. Incomes over €52,151(€104,302) are taxed at 42%. In addition to this there is the "solidarity surcharge" of 5.5% of the tax, to cover the costs of integrating the states of the former East Germany.
Deductions are granted for circumstances such as children under 18 (or under 27 if still attending school and without earnings), specified insurance premiums, charitable and political contributions to German entities up to certain limits and unavoidable extraordinary expenses above a certain limit (such as illness).
Deductions from compensation are also made for four social programs; retirement, unemployment, health insurance and long-term nursing care. Payments for these programs are borne equally by the employer and the employee. The employer's share of contributions is not considered as taxable income to the employee and the employee's portion is tax deductible up to a certain limit.
If an individual is subject to German tax, generally most sources of income are then taxable. The Lohnsteuer (wage tax), which alone accounts for a third of the German government's revenue, is withheld at source from compensation. Income from other sources (e. g. self-employment, fees for services, rent collections, investments and the like) are covered by the Einkommensteuer (income tax).
The Lohnsteuer differs from the Einkommensteuer only by the method of collection. The Lohnsteuer is collected at source and paid directly to the Finanzamt (tax office) by the employer while the individual must pay the Einkommensteuer himself. Therefore the Lohnsteuer is comparable to the income tax withholding shown on the U.S. Form W-2 (Lohnsteuerkarte).
Based primarily on your final payment for the previous year, the Finanzamt will estimate your tax for the current year and require you to make prepayments (Vorauszahlungen) of a quarter of the tax on March 10, June 10, September 10 and December 10. The total tax liability is determined by filing an income tax return, which includes all types of income from all sources. Wage tax withholding as well as provisional payments are deducted from this total tax liability so that a refund or final tax payment is assessed. The tax assessment is usually issued by the Finanzamt between two and six months from the date the return is filed. No payment will be due before receipts of the tax assessment notice.
Every tax return is under audit, therefore if the tax assessment is issued and is not preliminary, the assessment can only be changed in the future by the occurrence of extraordinary circumstances (e. g. tax evasion).
As a rule, the income tax return (Einkommensteuererklärung) should be filed by May 31 of the year following the one in which the income was received. If you use the assistance of a tax consultant, you have an automatic extension to file until September 30. There may be penalties and interest assessed if the return is filed late.
There are a few situations where the taxpayer is required to pay taxes even though the income is less than the personal allowance, especially when tax-exempt income (such as foreign-sourced income) must be considered for the determination of the applicable income tax rate (progression clause). Taxes are then assessed based on a sliding scale.
And please use the search function and go through the other posts. This topic has been covered many times over.
victgann
Long-Haul - are you definite about that???

The rate of income tax in Germany increases progressively, ranging from 0% to 45% (marginal tax rate). The so-called solidarity surcharge (Solidaritaetszuschlag) at a rate of 5.5% of income tax has to be paid on top of this (e.g. 25.00 % tax rate * 5.5 % solidarity surcharge = 26.375 % taxes in total). No income tax is charged on the basic allowance, which is EUR 7,834 (2009) for unmarried persons and EUR 15,668 (2009) for jointly assessed married couples.

I know in Ireland - that you are not taxed on the first few thousand - and then taxed at what ever rate after that. Id be interested to hear other peoples opeinions on this -
long-haul
That was my interpretation. From the text you have provided, it looks like i am wrong, But maybe some experts here can throw some light on this?
long-haul
I used the same calculator and typed in my monthly gross pay in the "gross" field and put a 0 for "non taxable amount" and the result i got correlates with the net income i get every month. only that i pay 14,9% health insurance and the calculator has only 14,6% as the highest slab and i took it. But with the differences worked out, the calculator seems to be correct.
victgann
hmm- better look into this further -
long-haul
Long-Haul - are you definite about that???The rate of income tax in Germany increases progressively, ranging from 0% to 45% (marginal tax rate). The so-called solidarity surcharge (Solidaritaetszuschlag) at a rate of 5.5% of income tax has to be paid on top of this (e.g. 25.00 % tax rate * 5.5 % solidarity surcharge = 26.375 % taxes in total). No income tax is charged on the basic allowance, which is EUR 7,834 (2009) for unmarried persons and EUR 15,668 (2009) for jointly assessed married couples.I know in Ireland - that you are not taxed on the first few thousand - and then taxed at what ever rate after that. Id be interested to hear other peoples opeinions on this -
I spent a lot of time yesterday with the calculators and tried to figure out how the monthly wage and yearly tax are calculated and the correlation between the two. I can't surely say that i understood everything. But here is what i learnt. Actually they deduct the basic allowance from the gross annual pay and then the remaining amount is taxed. In your case, if you are single then, your monthly tax will be calculated as follows apart from other deductions for (Obligatory Pension Insurance, Unemployment Insurance, 14% Health Insurance (+ 0,9% from the Employee alown)and Disability Insurance.)

Your Gross (monthly) = 4,166 €
Lump sums deducted (monthly) from gross = 353,9 € (Here is where i spent hours together but am unable to find out how this monthy deduction is calculated. If anyone can throw somelight here then it will be of real help)
Your taxable monthly pay = 4166 - 353,9 = 3812.10 €

You can check this by typing your gross pay, i.e 4166 € in this calculator.

If you multiply 3812,10 € by 12 then the amount you get equals the figure indicated in the calculator as

calculation is based on a taxable income per year (lump sums deducted) : 45745.0 Euro
Accordingly your monthly take home will be 2368,40 € per month.

But what i said yesterday is partly correct. In the Tax-Free Allowence (from Tax card) bracket in the calculator, you don't put anything. i.e. you just add a "0" there. The 7664 € basic allowance deduction will automatically happen if you are a single person and if you have any further tax free allowance like "pendler pauschale" (commuting allowance) etc etc, then you should add that in this box and not the basic allowance.

Hope this is of some help to you.

Cheers,

Lh
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