What are German tax classes (Steuerklassen) 1 to 6 and when do they change?

Germany has six Steuerklassen (tax withholding classes) that determine how much Lohnsteuer is withheld from an employee's paycheck. The classification is stored electronically with your local Finanzamt and communicated to your employer digitally via the ELStAM system.

Class I applies to single, divorced, widowed, or permanently separated people. Class II applies to single parents who raise at least one child in their household and qualify for the Entlastungsbetrag für Alleinerziehende (single-parent relief of €4,260 in 2024). Class III is for the higher-earning spouse in a married couple or civil partnership; it applies the lowest withholding rate because it factors in the Splitting advantage and assumes the other spouse is in Class V. Class IV applies to both spouses when both work and have similar incomes; a Factor variant (Faktorverfahren) can be added for more precise withholding. Class V is the counterpart to Class III for the lower-earning spouse. Class VI is used for any second or additional employment and has no personal allowances, resulting in the highest withholding rate.

You can apply to change your Steuerklasse through your Finanzamt when your circumstances change: marriage, divorce, separation, birth of a child, new job, or a significant change in income balance between spouses. The change applies from the following month. Class III/V combinations are reviewed annually and may result in a repayment demand if the combined withholding was too low.

This is general information only, not professional tax advice. Consult a qualified tax professional for your specific situation.