German Tax Classes (Steuerklassen) Explained

What a tax class actually does

Germany collects income tax from employees as you earn, through wage tax (Lohnsteuer) deducted at source. To know how much to deduct, payroll needs an estimate of your yearly situation: are you single, do you have a spouse with no income, is this your second job? The tax class is that estimate, compressed into a single number from 1 to 6.

Each class carries a different set of built-in allowances. Class 3 applies a married person's double basic allowance, class 5 applies none, class 6 strips out everything. At the end of the year your actual liability is calculated properly in your tax return (Steuererklärung), and the difference comes back as a refund or goes out as a payment.

The six classes

Class	Who it applies to	Effect on monthly pay
1	Single, divorced or widowed, no children in the household. The default for most arriving expats.	Standard withholding with the full basic allowance.
2	Single parents living alone with at least one child for whom they receive child benefit (Kindergeld).	Slightly lower withholding thanks to the single-parent relief amount (Entlastungsbetrag).
3	The higher-earning partner in a married couple or civil partnership, where the other takes class 5.	Markedly lower withholding: the couple's combined allowances sit here.
4	Both partners in a married couple, each earning a similar amount.	Similar to class 1 for each partner.
5	The lower-earning partner where the other has taken class 3.	High withholding, because the allowances have moved to the partner.
6	Any second or further job held alongside a main job.	Highest withholding. No allowances at all, so tax starts at the first euro.

You do not choose class 1, 2 or 6 — they follow from your circumstances. The only real decision is the combination a married couple picks.

Couples: 3/5, 4/4, or 4/4 with the factor

Married couples and registered civil partners are automatically put into 4/4 when they marry. Three combinations are then available.

Class 4 and 4

Each partner is taxed roughly as if single. This is the sensible default when incomes are within about 10% of each other. Withholding is close to the true liability, so the tax return produces neither a large refund nor a large bill.

Class 3 and 5

The higher earner takes class 3 and receives a visibly larger net salary; the lower earner takes class 5 and loses a disproportionate share. The combined monthly net is usually higher than under 4/4, because the couple is effectively front-loading the benefit of income splitting (Ehegattensplitting).

The catch is that 3/5 systematically under-withholds, so a tax return is mandatory and often ends in a payment. It also feels unfair to the class 5 partner, whose payslip can show a deduction rate above 40% on a modest salary.

Class 4 and 4 with the factor method

The factor method (Faktorverfahren) is the underused middle option. You stay in 4/4, but the tax office applies a factor based on your expected combined income so that each partner's withholding matches their actual share of the joint bill. You get the splitting benefit without the year-end surprise. You request it explicitly, and it needs renewing when your incomes change substantially.

Where your class genuinely matters

Because the class only shifts timing, there is one exception that makes it worth real money: wage-replacement benefits are calculated from your recent net salary, not your gross.

• Parental allowance (Elterngeld) — based on net income in the twelve months before birth. The parent who will take the leave should move to class 3 well in advance; the change generally needs to be in place at least seven months before the start of maternity protection to count for the whole reference period.
• Unemployment benefit (Arbeitslosengeld) — also net-based, so class 5 shortly before losing a job reduces the payment.
• Sick pay (Krankengeld) and short-time work (Kurzarbeitergeld) — same principle.

Outside these situations, choosing 3/5 over 4/4 is a decision about whether you would rather hold the money during the year or hand it to the tax office and get it back later.

How to change your tax class

Married couples submit the form Antrag auf Steuerklassenwechsel bei Ehegatten to their local tax office (Finanzamt). The simplest route is the free ELSTER online portal; a signed paper form also works. Both partners sign, except when moving to the automatic 4/4 combination.

The change normally takes effect from the beginning of the following month. The old rule limiting couples to one switch per year no longer applies, so you can change as often as your circumstances justify.

Other changes happen through different channels: single parents apply for class 2 with a declaration that no other adult lives in the household, and class 6 is assigned automatically when you declare a second employer. If you arrive in Germany mid-year, your first class is set from the details you gave at address registration (Anmeldung), so check your first payslip carefully.