Wage tax (Lohnsteuer) is the form of income taxation for employees in Germany. The employer deducts it directly from the gross salary and remits it to the tax authority. It is an advance payment on the annual income tax (Einkommensteuer).
Determining factors
The amount depends on:
- Monthly gross salary
- Tax class (Steuerklasse): I to VI
- Allowances registered in the electronic payroll tax database (ELStAM)
- Church membership (Kirchensteuer)
Refund via tax return
If the wage tax deducted exceeds the annual tax assessed (common for classes IV–VI with high professional expenses), a refund is made through the tax return.
Sources: §§ 38–42g EStG, LStR.