Understanding the German income tax system is rather simple, if all your income comes from employment, chances are you will get some money back, if you fill out a tax refund at the end of the year. Below is an example of the gross and net salary of a non-married employee without children living in Bavaria (if you are married and/or have children, your net will be higher). The example is taken from the TUM website, where you can find more info.
Gross and Net Salary Example
Gross income 3,250 EUR
Income tax 506.33 EUR (tax bracket I – Steuerklasse 1)
Solidarity tax 27.85 EUR (5.5% of total of income tax, capital returns tax, corporate tax)
Church tax - 40.51 EUR (8% of income tax, optional)
Health insurance 273 EUR (employee`s share 7.3%, employer`s share 7.3%. Additionally the employee has to pay a premium that differs, depending on the health insurance company. Here: AOK Bayern with 1.1%)
Nursing care insurance 42.25 EUR (employee`s share 1.275%, employer`s share 1.025%, in total 2.3%)
Pension insurance 303.86 EUR (employee`s share 9.45%, employer`s share 9.45%, in total
Unemployment insurance 48.75 EUR (employee`s share 1.5%, employer`s share 1.5%, in total 3%)
Total taxes: 574.69 EUR
Total insurances: 667.86 EUR
Net income: 2,007.45 EUR
The amount of taxes to be paid depends on the tax bracket (Steuerklasse) in which you will be categorized which depends on your personal situation. After your registration of residence you will receive a letter after 1-3 weeks with your tax ID (in German simply called the Steueridentifikationsnummer). You have to forward this number to your employer. They will be informed about further necessary details in order to calculate your income taxes by the respective tax authority (Finanzamt). Check with your employer whether you have been put in the correct Steuerklasse (which is sometimes not the case) and if not, fill out this form and pay a visit to your local Finanzamt.