What are the German income tax rates and brackets for 2024?

Germany uses a progressive income tax system called Einkommensteuer (income tax). For 2024, the tax-free basic allowance (Grundfreibetrag) is €11,604 for single filers (€23,208 for jointly assessed couples). Income above this threshold is taxed progressively.

The rate starts at 14% just above the Grundfreibetrag and increases continuously up to 42% for incomes above €66,761. A top rate of 45% (the Reichsteuer) applies to income above €277,826. This top rate affects a very small proportion of taxpayers.

In practice, most employees pay Lohnsteuer (wage tax), which is income tax withheld directly from salary by the employer based on the employee's tax class (Steuerklasse). Lohnsteuer is not a separate tax; it is income tax collected at source. If your only income is a salary, you may not need to file a tax return at all, though doing so often results in a refund if you have deductible expenses.

The actual effective tax rate you pay is lower than the marginal rate because lower income bands are taxed at lower rates. Someone earning €80,000 in 2024 pays an effective rate of roughly 26%, not 42%.