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Taxes

What is Wage Tax?

Wage tax is the biggest deduction from your salary – around €500-600 monthly on a €4,000 gross salary. It is withheld automatically before you ever see your money.

Wage tax is probably the single biggest deduction from your salary. On a gross salary of €4,000, you pay between €450 and €700 in wage tax per month, depending on your tax class. That's €5,400 to €8,400 per year – a sum worth taking a closer look at.

Why is this relevant to you? The good news: a large part of it is just an advance payment! The actual tax is only calculated in your annual tax return, and there you can often reclaim several hundred euros through work-related expenses, special expenses and other deductions. On average, employees get around €1,100 back. So if you deduct €300 for your commute, €200 for professional literature and €150 for work equipment, you lower your tax burden by about €200.

Practical tip: you can also secure more net income during the year by registering a tax allowance with the tax office. This is especially worthwhile if you have high recurring expenses, such as a long commute (over 20 km) or maintaining two households.

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