Job offers in Germany and Austria state a gross salary. What reaches your bank account is much lower, because income tax and social contributions are taken off every month. This guide explains the main parts so you can compare offers. It is general information, not tax advice.
All figures are for 2026 and come from official sources linked in the text. Tax rules change every year, so check the links before you rely on a number.
Germany: how your pay is taxed
Your employer takes wage tax (Lohnsteuer) and social contributions from your salary every month and pays them to the authorities. You don’t pay them yourself. At the end of the year you can file a tax return to get back tax you overpaid, for example because of work expenses.
To be paid correctly from your first month, you need a tax ID. You get it automatically after you register your address. The Federal Central Tax Office (BZSt) issues it once the registration office has sent it your data (BZSt). Our relocation checklist explains the steps.
Income tax rates in 2026
Germany uses a progressive tax. The rate rises smoothly with your taxable income (§ 32a Income Tax Act, Federal Ministry of Finance):
| Taxable income per year (single person, 2026) | Marginal tax rate |
|---|---|
| Up to €12,348 | 0% (basic tax-free allowance) |
| €12,349 to €69,878 | rises from 14% to 42% |
| €69,879 to €277,825 | 42% |
| From €277,826 | 45% |
The tax-free allowance (Grundfreibetrag) rose by €252 to €12,348 in 2026 (Federal Ministry of Finance).
These are marginal rates: the rate on each extra euro, not on your whole income. Your average rate is always lower. “Taxable income” is also lower than your gross salary, because social contributions and some allowances are deducted first.
Married couples who file jointly are taxed on half their combined income, and the result is doubled (income splitting). This helps most when one partner earns much more than the other (Federal Ministry of Finance).
Solidarity surcharge
The solidarity surcharge (Solidaritätszuschlag) is 5.5% of your income tax. It only applies when your annual income tax is above €20,350 (single) or €40,700 (joint filers), and it is phased in gradually above those limits (Solidarity Surcharge Act §§ 3–4). Note that these limits refer to the tax you owe, not to your salary.
Church tax
If you are a member of a church that levies church tax, such as the Catholic or Protestant church, you pay church tax (Kirchensteuer) on top of your income tax. It is 8% of your income tax in Bavaria and Baden-Württemberg, and 9% in the other states (Federal Ministry of Finance, Steuern von A bis Z).
The registration office records your membership of a tax-levying religious community when you register your address (§ 3 Federal Registration Act), and this is passed on for wage tax. Answer the religion question on the registration form accurately. If you are not a member, you don’t pay church tax.
Tax classes (Steuerklassen)
Your tax class decides how much wage tax your employer takes off each month. It does not change your final tax for the year; that is settled in your tax return. There are six classes (§ 38b Income Tax Act):
| Class | Who it is for |
|---|---|
| I | Single, or married people who don’t qualify for classes III or IV (for example, if permanently separated) |
| II | Single parents who get the single-parent relief |
| III | Married, both taxable in Germany; the higher earner, when the partner is in class V |
| IV | Married, both taxable in Germany (the default for couples) |
| V | The partner of someone in class III |
| VI | Your second and any further jobs |
Couples can also choose class IV with a factor (the factor procedure). A 2024 government plan proposed merging classes III and V into the factor procedure by 2030. As of September 2026 this has not become law, so all six classes still apply. The government’s draft income tax reform for 2027 would raise the tax-free allowance to €12,564 in 2027 and €12,900 in 2028 (Federal Government). It is a draft until parliament passes it.
Germany: social contributions in 2026
Social insurance is also taken from your gross pay. For most contributions, you and your employer each pay about half.
| Insurance | Total rate (2026) | Your share as an employee | Source |
|---|---|---|---|
| Pension | 18.6% | 9.3% | Deutsche Rentenversicherung |
| Unemployment | 2.6% | 1.3% | Federal Ministry of Labour |
| Health | 14.6% + your insurer’s additional rate (average 2.9%) | half of both | Federal Ministry of Health |
| Long-term care | 3.6% (4.2% if you have no children) | 1.8% (2.4% if you have no children) | Federal Ministry of Health |
A few details:
- Each health insurer sets its own additional rate. 2.9% is the official average for 2026 (Federal Ministry of Health). Your insurer’s rate may be higher or lower, so compare before you choose.
- The childless surcharge of 0.6 percentage points in long-term care is paid by the employee alone. It does not apply before age 23 (Federal Ministry of Health).
- Contributions are capped. Pension and unemployment contributions are only charged on salary up to €101,400 a year (€8,450 a month). Health and care contributions are charged on salary up to €69,750 a year (€5,812.50 a month) (Federal Government).
- Private health insurance is an option for employees who earn more than €77,400 a year in 2026 (Federal Government). Read the rules on switching back to public insurance before you decide.
The pension ceiling also matters for your visa. The EU Blue Card salary thresholds are set as a percentage of it.
Germany: estimate your net salary
Wage tax depends on many details, such as your tax class, children, church membership and health insurer. The most reliable way to estimate your monthly net pay is the Federal Ministry of Finance’s official wage tax calculator at bmf-steuerrechner.de. Enter your gross salary, tax class and the other details, then subtract your social contributions.
To see what employers actually offer, read our software engineer salary guide.
Austria: the short version
Austria also taxes salaries progressively and deducts tax and social insurance through payroll. The main difference for tech workers is the lower tax on the 13th and 14th salary.
Income tax rates in 2026
| Taxable income per year (2026) | Marginal tax rate |
|---|---|
| Up to €13,539 | 0% |
| €13,539 to €21,992 | 20% |
| €21,992 to €36,458 | 30% |
| €36,458 to €70,365 | 40% |
| €70,365 to €104,859 | 48% |
| €104,859 to €1,000,000 | 50% |
| Above €1,000,000 | 55% |
The brackets were raised by two-thirds of the inflation rate for 2026. The 55% rate applies until 2029 (Austrian Business Service Portal, USP).
The 13th and 14th salary
Under the IT collective agreement (IT-KV), which covers IT service companies, all employees get a 13th and 14th monthly salary, paid as Christmas and holiday pay (WKO, IT-KV 2026). These are taxed at fixed, lower rates: the first €620 a year is tax-free, the next €24,380 is taxed at 6%, the next €25,000 at 27% and the next €33,333 at 35.75%. The lower rates apply up to one-sixth of your regular annual pay, which is about two monthly salaries (Federal Ministry of Finance, Steuerbuch 2026).
When you compare an Austrian offer with a German one, check whether the annual figure includes these two extra payments. Our salary guide explains how Austrian job ads state pay.
Social insurance
Salaried employees in Austria pay 18.07% of their gross salary in social insurance, including the chamber of labour and housing contributions. Salary above €6,930 a month (2026) is not subject to contributions (Austrian Health Insurance Fund, ÖGK).
In Vienna, the housing contribution (Wohnbauförderungsbeitrag) rose from 0.5% to 0.75% for employees on 1 January 2026, so employees in Vienna pay slightly more (City of Vienna).
Church contribution
Austria has no church tax collected through payroll. Members of recognised churches pay a church contribution (Kirchenbeitrag) directly to their church. You can deduct up to €600 a year of it from your taxable income (Federal Ministry of Finance, Steuerbuch 2026).
Estimate your net salary in Austria
The Federal Ministry of Finance offers official tax calculators, including a gross-to-net calculator, at bmf.gv.at.
Common questions
Do I have to file a tax return in Germany?
Not always. If wage tax was deducted from your salary, a tax return is required only in certain cases listed in § 46 Income Tax Act. These include:
- you worked for more than one employer at the same time,
- you are married, both of you earn a salary, and one of you is in class V or VI, or you use the factor procedure,
- you had other income of more than €410, such as freelance income, or more than €410 of income that is subject to the “progression clause”. In the year you move, this can include foreign income that was not taxed in Germany (§ 32b Income Tax Act).
If none of these apply, you can still file voluntarily. Many employees do, because they can claim work expenses and other deductions and get a refund.
What about my home country?
If you still have income, property or tax residence in another country, a double taxation agreement may decide where you pay tax. Get advice before you move.
Frequently asked questions
Which German tax class should I choose?
It depends on your situation, and it only changes the monthly wage tax, not your final tax for the year, which your tax return settles. Single people are usually in class I. Married couples who are both taxable in Germany are in class IV by default, or can combine III and V, or use the factor procedure.
Do I have to pay church tax in Germany?
Only if you are a member of a church that levies church tax, such as the Catholic or Protestant church. It is 8% of your income tax in Bavaria and Baden-Württemberg and 9% in the other states. Your membership is recorded when you register your address, so answer the religion question on the form accurately.
How much of my salary goes to social insurance in Germany?
In 2026 your employee share is 9.3% for pension, 1.3% for unemployment, half of 14.6% plus half of your insurer’s additional rate (2.9% on average) for health, and 1.8% for long-term care, or 2.4% without children. Pension and unemployment are only charged on salary up to €101,400 a year, health and care up to €69,750.
How do I work out my net salary in Germany?
Use the Federal Ministry of Finance’s official wage tax calculator, linked in this guide. Enter your gross salary, your tax class and the other details it asks for, then subtract your social contributions. Wage tax depends on many details, such as children, church membership and your health insurer, so treat the result as an estimate.
Who pays the solidarity surcharge?
Only people with a higher tax bill. The surcharge is 5.5% of your income tax, but it only applies when your annual income tax is above €20,350 for single filers or €40,700 for joint filers, and it is phased in gradually above those limits. The limits refer to the tax you owe, not to your salary.
How are the 13th and 14th salaries taxed in Austria?
At fixed, lower rates. The first €620 a year is tax-free, the next €24,380 is taxed at 6%, the next €25,000 at 27% and the next €33,333 at 35.75%. These rates apply up to one-sixth of your regular annual pay, about two monthly salaries. Check whether an offer’s annual figure includes both payments.
Next steps
- Compare offers with our salary guide.
- Plan your budget with the cost of living in Berlin guide.
- Browse English-speaking jobs in Berlin, Munich and Vienna.