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EMPLOYMENT

Why German taxpayers don’t pocket their own cash until mid-July

What does an average household in Germany surrender to the state every year? According to new research, employees don't work for their own wallet until mid-July.

Published: 15 July 2019 09:06 CEST
Updated: 15 July 2019 10:34 CEST
Why German taxpayers don't pocket their own cash until mid-July
Employees at the BMW plant in Leipzig earlier this year. Photo: DPA

Germans have to give up more than half – 53.7 percent – of their income to the state in 2019.

That's according to research by the lobby group the German Taxpayers Federation (BdSt) who pinpointed Monday as 'Steuerzahlergedenktag' (taxpayer memorial day) – the moment that Germans work for themselves again.

Converted to the year, it means the entire income earned by taxpayers and contributors before this date is – purely theoretically – transferred to the state in the form of taxes.

But from 9.56pm on Monday, employees can pocket cash for themselves again.

The BdSt made the calculations based on representative household surveys conducted by the Federal Statistical Office.

Tax high in Germany

According to the group's research, of every euro earned just 46.3 cents goes to the employee.

In fact, Germans are particularly burdened when it comes to tax compared to other countries. A report by the OECD published earlier this year revealed that Germany is second only to Belgium when it comes to high tax rates.

The Organization for Economic Cooperation and Development (OECD) compared 35 developed countries around the world.

The BdSt provided a breakdown of how taxes of employees in the Bundesrepublik are divided up: the largest part – 31.4 cents of every euro – is spent on social security contributions.

The value added tax (VAT) makes up 4.3 cents of every euro, while wage and income tax as well as the solidarity surcharge make up 13 cents.

READ ALSO: The ultimate guide to paying taxes in Germany

In addition, there are other taxes such as property tax, motor vehicle tax, insurance tax – and even coffee tax. In addition, Germans also have to pay the electricity levy and the television licence fee contribution (Rundfunkbeitrag), which amounts to 0.7 cents per euro.

Last year, the so-called taxpayers' memorial day was three days later, according to a report in the Frankfurter Allgemeine Zeitung published Friday. That's because at the turn of the year contributions to social security were reduced and income tax adjusted to reflect inflation.

READ ALSO: What you need to know about filing your tax return in Germany

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TAXES

Germany’s official online tax portal is now available in English

Anyone who has filled out official forms online in Germany knows how frustrating it can be to translate applications line by line. Fortunately, this year’s tax process may be just a bit less painful for English speakers.

Published: 10 April 2024 16:46 CEST
Germany's official online tax portal is now available in English

Non-native German speakers who need to file taxes this year are in luck – ELSTER, Germany’s online portal for self-reporting taxes, is now available in English.

German residents who are required to file taxes, including freelancers and self-employed workers, may have used ELSTER before to submit tax information to the Federal Central Tax Office (Bundeszentralamt für Steuern).

ELSTER, which is a kind of clunky acronym for ‘ELektronische STeuerERklärung’ or electronic tax declaration, was designed by the tax office and serves as the official online tax submission portal.

Now, visitors to the ELSTER webpage can click on three dots in the top right corner of the screen to reveal a drop down menu with a link to the English version of the site. Text on the website – and its tax forms – are then automatically translated.

However, it should be noted that translations are automated via DeepL, so some phrases are bound to be a bit wonky.

Also, ELSTER’s English service is not without limitations, such as more detailed instructional pages and explainer videos that are still only available in German. So for those with little to no German comprehension, it may still be advisable to have a German friend or colleague on-call when you begin to file.

READ ALSO: 8 unlikely tax breaks that international residents in Germany need to know

Who can file their taxes with ELSTER?

Anyone who is filing taxes in Germany can use ELSTER to do so electronically.

Freelancers and self-employed workers are required to file taxes in Germany, as are people who earn more than €410 in additional income (like from rental income). 

Additionally, people must submit a tax return if they have received more than €410 in wellfare benefits, such as unemployment (Arbeitslosengeld), sickness (Krankengeld), parental allowance (Elterngeld) or short-time working benefits (Kurzarbeitsgeld).

Full and part-time employees generally aren’t required to file taxes in Germany. But some wage and salary workers choose to file in order to get a tax refund, especially when they qualify for specific tax write-offs.

The filing deadline for taxes was extended during Covid, so taxpayers have until September 2nd this year to file for income earned in 2023. Next year the deadline will return to normal, so a 2024 tax return will be due by July 31, 2025.

READ ALSO: What are the 2024 deadlines in Germany to submit my tax return?

If you wish to file your German taxes electronically, you will need to create an account with ELSTER, which requires a residence permit with an activated eID function. 

While ELSTER is Germany’s official tax filing portal, there are also several apps with an English-language function which residents can use to file their taxes, such as TaxFix and Wundertax. 

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