Income tax (Einkommensteuer) is Germany's annual tax on the total income of natural persons. It applies to seven types of income: employment income, self-employment income, rent, capital gains, etc.
Tax rates 2026 (simplified)
- 0% up to 12,348 € (Grundfreibetrag)
- 14–42% progressive zone (12,349 € to approx. 68,430 €)
- 42% (standard top rate) from 68,430 € to 277,825 €
- 45% (Reichensteuer) above 277,825 €
Lohnsteuer and Einkommensteuer
Lohnsteuer is an advance deducted at source; Einkommensteuer is calculated annually. The difference results in a refund or additional payment.
Sources: § 32a EStG, BMF.