Wages and Incidental Costs | HEUSER RECHT UND STEUERN
Incidental
Wage Costs
In comparison to the rest of Europe,
in Germany, the ancillary costs paid
by employers are slightly below
average. The burden for employees,
however, is comparatively high.
It is the employers’ obligation to withhold
incidental costs as taxes and social
security contributions and pay them to
the respective authorities and insurance
companies.
Individual Income Tax
The Germany individual income
tax is staggered dependent on the
amount of income. It ranges between
4 and 45%.
€9,408 per year are tax-free. Only
income that exceeds this limit is
taxable - beginning at a rate of
4%. The marginal tax rate of 42% is
reached at an annual taxable income
of €57,052. A supplementary rate of
3% is added to annual incomes over
€270,501 - so that, including this
wealth tax, the tax rate amounts to
45%.
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