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There are many different types of tax in Germany and there are numerous tax calculators on the internet for calculating the tax burden, whether as an employee, employer, self-employed person, or entrepreneur.
Our German tax calculator helps you to clarify the taxation of your corporation, such as a GmbH or UG.
In our article on the corporate tax rate, we have compiled a list of the types of tax that your GmbH or UG must pay according to the annual profit. These are Corporation tax, Trade tax, and Solidarity surcharge.
All these taxes relate to profit. In other words, all income minus the expenses that your company incurs. In Germany, you can claim many costs as expenses.
It is also possible to reduce the tax burden by transferring profits from one year to the next if, for example, you anticipate high investment costs in the future. You can and should discuss all of this with your tax advisor when preparing your annual financial statements, who can support you with legal tax planning.
Under the tax calculator, you will find further links to other calculators that will help you calculate the tax burden if you want to hire employees, payout profits from the company, or want to know more about social insurance fees.
The calculator above helps you to determine the tax burden of your company. However, this only focuses on the company level. If you want to withdraw profits from the company, you still have to pay dividend tax and if you employ staff, you have other tax burdens that should not be forgotten. In the following, I would like to give you an overview of the most important tax issues in Germany and gain a deeper understanding of them.
This encompasses several types of mandatory insurances including health insurance, pension insurance, unemployment insurance, accident insurance, and care insurance. These insurances are funded by contributions from both employers and employees.
Health insurance is compulsory in Germany, and residents can choose between statutory health insurance (Gesetzliche Krankenversicherung) and private health insurance (Private Krankenversicherung). Contributions are typically split between the employer and the employee.
This is a mandatory insurance scheme that provides benefits during retirement and in cases of disability and death. Contributions are made by both employees and employers, ensuring individuals receive a pension in old age based on their contributions during their working life.
Also part of Germany's social insurance system, this insurance provides financial support in the event of unemployment. Contributions are paid by both employers and employees.
A type of income tax that is withheld directly from an employee's salary by the employer. The amount withheld depends on the employee's earnings, tax class, and other factors.
To calculate this, you can access various German income tax calculators, like this.
It was introduced in 1991 to help finance the costs of integrating the eastern and western parts of Germany after reunification. It is levied at 5.5% of the corporate tax your company has to pay. Companies need to pay this after the first EUR profit they make.
On the other hand, individual people need to pay the solidarity surcharge only if they are among the higher earners. For around 90 percent of income taxpayers, the solidarity surcharge no longer applies, while a further 6.5 percent pay less solidarity surcharge.
