Doorstep

Living in Germany

How to pay less tax in Germany

Legal ways to keep more of your salary – many expats miss them.

Germany has high taxes – but also many legal ways to pay less. Most of them only work if you claim them.

1. File a tax return every year

Payroll tax assumes the standard flat rates. Your real costs are often higher – the difference comes back as a refund. In the year you arrive in Germany, the refund is often especially high.

2. Claim your work costs

• Commuting to work and home office days
• Laptop, desk, phone and work books
• Moving to Germany for your job: flights, moving costs, temporary flat
• German courses and training for your job

3. Family in India

• Money you send to support your parents can be deductible – keep every bank receipt.
• If your spouse and children still live in India, you may be able to claim a double household (rent here, flights home).

4. Pension and employer benefits

• Company pension (bAV): part of your salary goes into a pension before tax and social security.
• Capital-forming benefits (VL): many employers pay a monthly amount on top – you only have to ask.
• Private pension plans like the Basisrente are tax-deductible up to a high limit.

5. Investing

• Every person has a tax-free allowance of €1,000 per year on investment income (€2,000 for couples).
• Give your bank an exemption order (Freistellungsauftrag) – otherwise tax is deducted automatically.

6. Couples and families

• Married couples can choose their tax classes (III/V or IV/IV) – the right choice changes your monthly net salary.
• Childcare costs (Kita, nanny) are partly deductible.

7. Smaller things that add up

Donations, household services and craftsmen's work in your flat, and the fee of your tax advisor.

Every case is different. Use the tax refund check to see what you can get back – and book a free call to plan how to pay less next year.

All guides

Doorstep is a free app for Indians moving to and living in Germany, by Arenja & Raj Finanz GmbH. Imprint · Privacy