Tax Classes in Germany: How the Steuerklasse Affects Your Pay

The tax class in Germany (Steuerklasse) is used to calculate payroll tax (Lohnsteuer), which the employer withholds each month. It affects your monthly net pay but does not change the total amount of income tax for the year: the final calculation is made through your tax return and tax assessment notice (Steuerbescheid).

This topic is particularly important for employees, spouses, and registered partners. For the self-employed, the tax class usually does not play such a significant role because they do not receive a salary through the German payroll system with monthly Lohnsteuer withholdings.

What Is a Tax Class?

There are six tax classes in Germany. They depend not on one’s profession, but on marital status, the number of employment relationships, and certain personal circumstances.

Tax Class	Who It Is Typically Assigned To
Tax Class I	Single, divorced, permanently separated, and widowed after the transition period
Tax Class II	Single parents, provided the conditions for the Entlastungsbetrag für Alleinerziehende are met
Tax Class III	A spouse or registered partner with a higher income in the III/V combination; also possible in certain cases following the death of a spouse
Tax Class IV	For spouses and registered partners, provided both live in Germany; the standard option after marriage
Tax Class V	The second spouse or partner in a III/V combination, usually with a lower income
Tax Class VI	For a second or subsequent employment relationship, if the employee has multiple employers

Tax class assignment is usually based on ELStAM data, which the employer receives for payroll processing. The tax class itself can be found on the pay stub: it is often listed as Steuerklasse or StKl.

See also:

Explanation of the German pay stub ()

Example of a German pay stub

How the tax class affects your paycheck

Tax classes do not determine specific income tax rates. Their purpose is to allocate tax-exempt amounts, flat-rate allowances, and advance withholdings so that the employer can estimate the monthly Lohnsteuer.

In practice, this means the following:

• Tax classes I, II, and IV often result in relatively similar tax calculations for people without complex family situations.
• Tax class III generally results in a higher net salary over the course of the year because it allows for a larger tax-free allowance.
• Tax class V, on the other hand, often results in a significantly lower net salary.
• Tax class VI is usually the least favorable for current withholding because it applies to side jobs.

In 2026, the basic tax-free allowance (Grundfreibetrag) is 12,348 euros for a single person. For married couples filing jointly, the overall annual calculation is what matters, so the monthly allocation based on the tax class does not equal the final tax benefit.

Illustration of how tax-free allowances are allocated across tax classes

The Main Misconception About Steuerklasse

Changing your tax class does not, in and of itself, reduce your annual income tax. It changes how much is withheld from your pay now and how much you may be due as a refund or additional payment after filing your tax return.

Example of how it works:

• In the case of tax class IV/IV, withholdings are often distributed more evenly between spouses;
• In tax class III/V, one spouse receives a higher net monthly income, while the other receives less;
• For tax classes III/V or IV/IV with a factor, filing a tax return is usually mandatory;
• If too little was withheld during the year, the Finanzamt may require an additional payment.

See also:

How to File a Tax Return in Germany

What combinations are available for spouses?

For spouses and registered partners, three options are generally relevant: IV/IV, III/V, and IV/IV with the factor method (Faktorverfahren). The choice depends on the difference in income and on whether it is more important to receive more money each month or to avoid a large additional payment after filing the tax return.

IV/IV

The IV/IV combination is generally appropriate if both spouses work and earn similar incomes. This is the standard option after marriage if both partners live in Germany and no application has been made for a different combination.

Pros:

• a clear and neutral option for similar income levels;
• there is no significant disparity between the net salaries of spouses;
• The risk of a large additional tax payment is generally lower than in tax classes III and V.

Cons:

• If income varies significantly, withholdings may not be distributed optimally;
• A refund may be possible after filing the return, but this depends on expenses, income, and other factors.

III/V

The III/V combination is usually considered when one spouse earns significantly more than the other. The spouse with the higher income is assigned tax class III, while the other is assigned tax class V.

Pros:

• For a spouse in tax class III, the monthly net salary is higher;
• This option may be convenient for families that need a larger current cash flow.

Cons:

• For a spouse in tax class V, withholding amounts are often very high;
• An additional payment may be due after the annual settlement;
• Filing a tax return is generally mandatory in such cases.

You shouldn’t choose this option just for the sake of feeling like you’re “saving money.” The total annual tax is determined by your total taxable income and the rules of Veranlagung, not by your desired monthly net pay.

IV/IV with a factor

The factor method (Faktorverfahren) was created to distribute Lohnsteuer more accurately between spouses. Both remain in tax class IV, but the tax office calculates a factor based on their expected income.

Pros:

• withholdings are closer to the expected annual tax;
• There is less disparity between spouses than under tax classes III and V;
• can reduce the risk of an unpleasant additional tax bill.

Cons:

• You must file an application and indicate your expected income;
• If your income changes, the calculation may no longer be accurate;
• Filing a tax return is generally mandatory when using the flat-rate method.

The official BMF calculator for the Faktorverfahren helps estimate the calculation, but it does not replace individual consultation and does not take all circumstances into account in the same way that the Finanzamt does when processing the annual tax return.

How Spouses Should Choose a Tax Class

There is no universal “best” combination. It makes sense to consider not only your monthly net pay but also the risk of having to pay additional taxes.

Situation	What is typically considered
Spouses’ incomes are similar	IV/IV
One spouse earns significantly more	III/V or IV/IV with a factor
A more accurate monthly calculation is needed	IV/IV with a factor
There is a risk of a large additional tax payment	Do not select III/V without calculating
One spouse has a second job	Tax class VI usually applies to the second job

Before changing your tax class, it’s a good idea to run a trial calculation based on several scenarios: your current combination, III/V, and IV/IV with a factor. It’s important to include not only your salary but also any benefits, periods of unemployment, maternity leave, sick pay (Krankengeld), parental allowance (Elterngeld), and other payments, if applicable.

When Is a Tax Return Required?

The requirement to file a tax return depends not only on the tax class. For married couples, the combinations III/V and IV/IV with a factor are particularly important: in such cases, a tax return is usually required because the tax office must reconcile the advance withholdings with the annual tax liability.

Obligations may also arise due to additional income, multiple employers, Lohnersatzleistungen, the Freibetrag in ELStAM, and other circumstances. If the situation is complex, it’s best to check the current rules on ELSTER, with the Finanzamt, or with a tax advisor.

How to Change Your Tax Class

Spouses and registered partners can apply to change their tax class combination. The form Antrag auf Steuerklassenwechsel bei Ehegatten/Lebenspartnern is typically used. You can submit it via ELSTER or on paper to your Finanzamt, if this option is available in your state and under your circumstances.

The general procedure is as follows:

1. Check the current tax classes on both spouses’ pay stubs.
2. Compare the IV/IV, III/V, and IV/IV options with the factor.
3. Have both spouses’ IdNr., address, date of marriage or partnership registration, and Finanzamt information ready.
4. Fill out the application to change your tax class.
5. File your return via ELSTER or send the signed form to the Finanzamt.
6. After processing, check your next pay stub and make sure your employer has received your updated ELStAM data.

Usually, both spouses sign the return if the couple’s tax situation changes. Registration may be required for ELSTER, so it’s best not to wait until the last minute to file.

What to Include in the Antrag auf Steuerklassenwechsel

The line titles and field numbers on the form may change, so it’s safer to focus on the meaning of the sections rather than on outdated numbering from other people’s instructions.

You’ll typically need:

• Steuernummer, if you already have one;
• zuständiges Finanzamt;
• Identifikationsnummer (IdNr.) for both spouses;
• names, dates of birth, and addresses;
• marital status and date of marriage or registration of partnership;
• current combination of tax classes;
• Desired combination: IV/IV, III/V, V/III, or IV/IV with a factor;
• Signatures of both spouses are required for paper filings.

If you have recently moved, your marital status has changed, one spouse is not yet registered in Germany, or you have income from abroad, it’s best not to fill out the form “by the book.” In such cases, it’s worth checking with the Finanzamt for specific instructions.

Common Mistakes

The misconception that tax class III/V reduces your tax liability

Class III/V may increase one spouse’s monthly net salary, but the annual tax liability does not decrease simply because of a change in tax class. An additional payment may be due after filing the tax return.

Compare only one salary

The situation must be assessed based on the couple’s combined income. If you look only at the net salary of a spouse in tax class III, the picture will be incomplete.

Ignore payments made in lieu of a salary

Elterngeld, Krankengeld, Arbeitslosengeld, and other Lohnersatzleistungen can affect your tax return and final tax liability through the Progressionsvorbehalt. With such payments, it is especially important to check the rules in advance.

Using an outdated form

Forms, links, and online services are subject to change. It’s best to obtain the application (Antrag) and instructions from ELSTER, formular-management-system.de, or your local tax office’s (Finanzamt) website, rather than from outdated blogs.

Brief Conclusion

In Germany, the tax class is a tool for calculating monthly Lohnsteuer, not a way to permanently reduce your tax liability. For single employees, the tax class is usually assigned automatically. For married couples, the choice between IV/IV, III/V, and IV/IV—with or without a factor—affects current cash flow, the obligation to file a tax return, and the risk of having to pay additional taxes.

If your income is similar, tax class IV/IV is often sufficient. If your income varies significantly, it’s worth comparing tax class III/V with the factor method. In non-standard situations—such as income from abroad, benefits, multiple jobs, divorce, living apart, or moving between states—it’s best to consult with the Finanzamt or a tax advisor.