50
The German tax system is not exactly clear, but the difference between tax class 1 and 4 is quickly and easily explained.
Tax class 1 and 4: What’s the difference?
- Tax class 1 is suitable for single, separated, divorced or widowed people without children. Tax class 4, on the other hand, is intended for married couples with a similar income.
- There is not much difference between tax class 1 and 4. In terms of income tax, you are treated the same in both tax classes.
- Basic tax-free allowance, flat-rate income-related expenses, special expenses and pension lump sum are the same for both tax brackets. If you are in tax class 4 and have children, you can also use the child allowance
Tax class 4: Does that make sense?
- Tax classes 1 and 4 are not exactly among the most favorable tax classes. If you are married, you do not necessarily have to switch to tax class 4.
- In this tax class, the tax burden and allowances are divided equally between both spouses. This only makes sense if both spouses earn roughly the same amount.
- If one spouse already earns 10 percent more income, it may be worth switching to tax brackets 3 and 5. This reduces the combined tax burden.
