Taxes in Germany explained (explainity® explainer video)

If you live in Germany and earn money, in most cases you have to pay Taxes. But why does the State delve into our pockets like this? And what does we get out of it? explainity tackles these questions and gives some answers in this short clip.

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This explainer video was produced by explainity GmbH

[kevinwendel]

Im from Germany and One thing I want to say:

Steuern are very very high!

👋

[jessicaallen]

Nice video!! Very engaging from beginning to end. Nevertheless, businesses and investment are the easiest way to make money irrespective of which party makes it to the oval office.

[rishabdhar]

Steuern = Strafe for me.


You are basically being fined for working hard and earning rather than dropping on social security. I honestly do NOT believe these taxes make lives of people better. Been to Switzerland many times, and in every aspect the quality of life is better there than in Germany - wages (almost 30-100% higher incomes) because employers do not have to pay 20% in taxes on health insurance and pension on top of your gross income, have lower VAT 7% (which means higher profit margins for businesses), lower corporate tax rates (again 20% difference).


And yet with all of this you have meticulous infrastructure, much cleaner streets, much better educated population (yes free education also exists in Switzerland in public schools and Universities), much lower cost of health care (for me 700 euros in Germany (350 euros emploers and 350 euros me) vs just 300 CHF in Switzerland) - you are basically fined in Germany for earning a living wage. Then your unemployment benefits and pension are just a pity in Germany that really do NOT justify 40% personal tax plus 19% VAT.


The publc health insurance is basically crumbling with long lines starting from Hausarzt until you actually get seen by a specialist. In Switzerland, you can directly go to a specialist.


You only get 60% of your take home as unemployment benefit (which is more like 36 cents on the dollar), and as an individual you would have anyway had more than this had you been the chance to save on your own. In Switzerland even with lower taxes your unemployment benefits are higher at 80% of take home (which usually amounts to 64 cents on the dollar).


And definitely good luck if you earn more than 78k euros in a year, you are essentially on your own, and the government will on top of that rob you of over 3k euros every month from your income.


Anyone who says cost of living is higher in Switzerland than in Germany, should hold their horses, because rents in German cities where you event get decent wages, like Munich Frankfurt are already at Swiss levels or higher. Not to mention rentals in Germany have no kitchen, and are just cold rents, vs warm rents in Switzerland with a kitchen. The only difference is food cost, for which you are more than compensated for and have the means due to lower taxes.


As an example, a Software developer who earns 80k n Germany will have a take home of 3.5k euros, whereas a software Developer in Switzerland with 110-120k CHF will have a take home of 6.5k - 7k euros. With Munich rent of 1500-1600 euros warm, the guy is left with 2k euros. In Switzerland, it would be 1500 CHF to be still left with 5k CHF after rent and 4700 CHF after health insurance. Even if your 600 euros of food in Mnich cost you 1200 CHF a month in Switzerland, you would save almost the same as the guy in Munich would have as take home pay. Heck you could even buy an expensive Mercedes for 1000 CHF a month and still save 2k euros a month. So you have higher savings, better pension plan, better health insurance, cleaner streets, better public transport, much greater freedom of expression (no EU based laws), a better currency that holds value. No wonder so few Swiss actually leave Switzerland for Germany.

[davidnelson]

This is a video explaining taxes in general, and the German words for them. Not covering specific taxes and rates for Germany, which is pointless considering the title.

[Radeon]

painting a false picture here, most of the stuff you buy in germany is taxed at 19% not 7% but yes papers are taxed 7% .But just to be real here in germany you pay about 60% in duties and taxes from your income when you are a normal employee. I would list everything here but im too lazy for that you can look it up yourself here are some keywords :
pension insurance, Health insurance,
care insurance, unemployment insurance, Solidaritätszuschlag, Lohnsteuer, Sozialabgaben, GEZ gebühren These are the things you MUST pay and there are also a lot of "hidden" stuff when you buy things and or services.

And it even goes crazyer when you owen a small business

[surreallife]

I was watching a video on German tax rates and the host said the tax rate in Germany is 55%. This is incorrect. As you said if you’re making under €9700 you don’t pay any tax. The 55% tax rate applies to the highest income earners. Also, it is a nominal tax rate. If for example somebody’s making under €10 million per year they pay lower tax rate but once they get over €10 million a year they pay 55% tax rate on whatever they make after €10 million. So if they made €10 million they are taxed at a lower tax rate, not 55%, but if they make over €10 million, for example €10, 100, 000 then they pay 55% on that extra $100, 000. The rest of the €10 million is taxed at a lower tax rate, which is called a nominal tax rate. I don’t know the specific numbers I’m just using this as an example. Can you do a video or explain to me how the nominal tax rate works for different income levels, not just the very rich but at all income levels and do all income levels have nominal tax rates? For example somebody making €50, 000 per year would pay the lower tax rate on that €50, 000 but if they made €51, 000 they would pay a higher tax rate on that extra €1000. Another words they would be text differently on those two incomes. A different tax rate of €50, 000 and the different tax rate on the extra €1000. Nominal tax rate.

[kedmoh]

What about as a day trader?how much % do you pay monthly or annually?

[marwentrabelsi]

is this easily explained ? you made it so complicated!

[m.farhana.rahman]

Anyone knows how do you calculate taxes if you got both self-employed and employed job (eg part time). I know for employed the employer will pay half of the medical insurance cost. So, how does it effect the medical tax when you also have self employed? Any recommendations of a good tax services?

[simpledeveloper]

Hi For me I just started work on this December, On my salary slip for this first month of work I found that I am in Tax Class / Category 6 because I didn't submit the tax Id to the company on time: obviously because It takes time after doing the anmeldung. My question is: Since now my tax ID is class 1, can I file a tax return to have those deduction reimbursed? Otherwise, should I just wait for the next month to see that Tax class updated on my salary slip ?

[amilcarschettini]

How about property taxes though? I want to move to Germany and I will buy a house or condo cash.

[SimpleManSweden]

It is simple. Don't work in Germany.
Germany 👎

[kimwinston]

Listen up guys. I am from Germany and I can tell you monetary conditions are getting catastrophic over here and I will back it up with some facts. First of all on Housing ; markets are open for international investors and German housing is quite a safe haven for investors. Rental prices totally decoupled from salaries. German people get squeezed like lemons. Meanwhile the average person can’t afford to buy a house nowadays. Especially in big cities like Berlin, Hamburg, Münich and Frankfurt. 
Stocks : Minister of finance is planning to raise taxes on gains very soon . No point buying stock when you live in Europe (Germany).
Gold : limit will be 2000 Euro for anonymous buying Gold with cash from 2020
Bonds: I don’t have to tell you it’s a joke. It’s like burning money. Same with savings in bank accounts.
European central banks keeps loose monetary policy and keep stealing wealth from people whether directly or indirectly.  2% every single year. There are not many options to preserve your wealth and invest in it. And then still manage to avoid not to get pinched by the government. There are ways around it .==>so lastly the only option left in my opinion is : Buy and investment in crypto currency. Bitcoin is a good trading investment option. I would highly recommend the best professional portfolio manager by the name Bitcoin Digger cryptofinnex.com or text whatsapp [phone] 
All I did was put a huge capital in crypto currency trading and over the years I implemented a technique of investment and profiting significantly with well equipped /prepared with the right tools such as AI trading bot with experienced manager. Reach me directly for consultation bitcoindigger86 <at> gmail <dot>com