Tax Classes in Germany: The Six Classes and Which One Suits You
The Six Tax Classes and Who Belongs to Each
| Category | For whom? | Practical note |
|---|---|---|
| Class 1 | Single, divorced, widowed after the second year, or married with a spouse residing outside the European Union | The default class for most newcomers |
| Class 2 | A single parent living with a child who is entitled to child benefits and does not share the household with another adult | Provides the Entlastungsbetrag, meaning an additional tax allowance for single parents — it is not granted automatically and must be applied for |
| Class 3 | The higher-earning married spouse, provided the other spouse takes Class 5 | The lowest monthly withholding among all classes |
| Class 4 | Married couples with similar incomes | The default class for married couples immediately after registering the marriage |
| Class 4 with Faktor | Married couples who want a fair distribution based on each spouse’s share of the total income | Reduces the likelihood of having to pay a difference at the end of the year |
| Class 5 | The lower-earning married spouse, corresponding to Class 3 | The highest proportional withholding — and this is where the misunderstanding occurs |
| Class 6 | Second job or additional jobs | No allowances, and the withholding is the highest |
The Three Available Combinations for Married Couples
Married couples have only three options: 4/4, 3/5, or 4 with Faktor. The difference between them is not in the total annual tax — which is approximately the same in all three cases — but rather in how it is distributed between the months and between the spouses.
- 4/4 is suitable when the two incomes are similar. Each person has tax withheld as if they were approximately single, and the adjustment takes place through the tax return.
- 3/5 clearly increases the net salary of the higher earner and significantly reduces the net salary of the other. The family’s total monthly income increases, but filing an annual tax return becomes mandatory and often ends with a request to pay the difference. Do not consider the monthly increase additional income — consider it a deferred loan to be repaid.
- 4 with Faktor is the most accurate: the tax office calculates a factor that distributes the tax burden according to each person’s share of the income, bringing the monthly withholding closer to the actual amount and reducing surprises.
Why Is Tax Class 5 Painful Even Though the Family Has Not Lost Anything?
Because Tax Class 5 does not receive the basic allowances — they have all been transferred to the Class 3 spouse. As a result, the lower earner sees a very high withholding rate applied to a small salary, which leads many wives in particular to believe that working is “not worth it.” The truth is that the family as a whole has not paid more; only the distribution is unbalanced. The usual solution is to switch to Class 4 with Faktor.
How Do You Change Your Tax Class?
The change is made by submitting an application to the Finanzamt responsible for your address, either electronically through the ELSTER portal or using a paper form signed by both spouses. The change is no longer limited to once a year and takes effect from the month following the approval of the application. Changing the tax class after marriage, childbirth, or separation is not automatic in every case, so do not assume that the system will correct it on its own.
Also note that the tax class affects the amount of some benefits calculated based on net salary, such as Elterngeld and Arbeitslosengeld. Therefore, many advisors recommend switching to a more suitable tax class sufficiently in advance of childbirth or the end of an employment contract.
A Legislative Trend Worth Following
German tax policy is moving toward gradually phasing out the 3/5 combination and moving married couples to the Faktorverfahren system, so that monthly withholding reflects each person’s actual share of the income. No final implementation date has been set yet, but anyone who chooses “4 with Faktor” today will already be ahead of the change.
For the other related procedures — health insurance, address registration, and calculating net salary — see our comprehensive Germany guide for Arabs.
This page is for general information only and does not constitute tax advice. Consult the tax office, a tax advisor (Steuerberater), or a wage tax assistance association (Lohnsteuerhilfeverein) before changing your tax class.
Official Source for Verification
This page explains the procedures in a simplified format for Arabic-speaking readers. For any legally binding details or official updates, refer directly to the competent authority: the German Federal Ministry of Finance.
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