Sorry in advance I have zero knowledge about taxes.

I found this in an article:

Husband John earns 75.000 EUR taxable income, his wife Mary earns 0. (Lets say this is me and my girlfriend or wife)

If not married, John’s tax would be 42% x 75.000 EUR – 8.780,90 EUR = 22.719 EUR
(Question 1: Why deduct 8780,90 EUR?)

If married, AND “couple taxation” is opted for, first both incomes are added up: 75.000 EUR + 0 EUR = 75.000 EUR. Then divided by two: 37.500 EUR. This income would be subject progression II. The rate is (37.750 – 14.254)/10.000 = 2,3246. The tax (216,16 * 2,3246 + 2.397) * 2,3246 + 965,58 = 7.705 EUR is then doubled: 15.410 EUR

(This is the article: https://the-red-relocators.com/relocation-guides-germany/taxes-in-germany/german-tax-classes/)

Question 2: According to this net income is nearly 80% – is this correct? This seems kind of too good to be true.

Question 3: How much net income can I expect if my salary is 75000 (like Johns)

2 comments

  1. > If not married, John’s tax would be 42% x 75.000 EUR – 8.780,90 EUR = 22.719 EUR (Question 1: Why deduct 8780,90 EUR?)

    Uh… no. The 8kish is probably the 0% tax bracket from whenever that was published. But taxes are still progressive, which I guess they seem to account for the second scenario? I’m not really sure what they’re doing there. The highest rate might be 42% but that doesn’t mean the person’s entire income is taxed at that much. Plus this completely ignores social contributions. And also fails at PEMDAS.

    A better way to think about married couples. Incomes are combined and tax brackets are more or less doubled.

    Whatever site this is, they don’t understand the basics of how taxes work if those examples are supposed to explain something useful.

    > Question 2: According to this net income is nearly 80% – is this correct? This seems kind of too good to be true.

    Just throw it in a tax calculator.

    > Question 3: How much net income can I expect if my salary is 75000 (like Johns)

    Just throw it in a tax calculator.

    What country are you from?

    Edit: Here’s a US based example, but the same concept applies. The numbers are just different. Read the “How Does a Progressive Tax Work?” section.

    https://www.thebalance.com/progressive-tax-definition-examples-4155741

  2. It is regulated as follows:

    There is a tax-free allowance of currently € 9984 per taxpayer. (I assume this means the 8780.90 from your example and is only a few years old). Every euro that exceeds this contribution is taxed. The first euro at 14%. Each additional euro is taxed a little more. From € 58,597 annual income, you have reached the top tax rate of 42%. Every additional euro is therefore taxed at 42%.

    However, this does not mean that you have to pay 42% of the entire amount. You only pay the average over the progression curve. In this case, about 26% or €15,491.That is the basic principle.

    If you are married, you are considered as one “tax case”. This means that all your incomes are added together and all allowances are doubled. This gives you a tax advantage if one partner earns much less than the other. If both earn the same amount, it comes out to the same.

    But no one does the maths. For this purpose, there are the so-called “Grund- und Splittingtabelle”.

    In your example, you would pay 22859.84 € in taxes as a single person with 75.000 € annual income. As a couple with the same joint income, you would pay 14,820.00 €.

    On top of that, however, there are also health and social insurances.

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