Employees in Germany

Working Expats in Germany

Tax Refund as an Expat

One has to file for tax return for that year even if the expat did not work a full year.  If the previous level of income is lower than the one in Germany the expat will get a refund.  The same applies if the expat did not work before arriving in Germany.  On the other hand if the previous income was higher than the one in Germany, the expat might have to pay extra.

How do Taxes affect expats staying and working in Germany for less than 183 days?

If the expat is a resident outside Germany while working in Germany, stays less than 183 days in Germany and gets paid by a non-German employer then the expat does not have to pay any taxes.

For expats which are single individuals or married couples earning only one income that have nothing but income from work as an employee that worked in Germany for the full year it will not be possible to file for a tax return.  However, there is the option to file a tax return if one expects a tax refund based on work related expenses.   Available for 4 years and in some cases even longer.

Tax Classes “Lohnsteuerklasse” for Expats
Class 1 Single Individual
Class 2 Single Parent
Class 3 Married Individual  – Higher Earner (Lower earner in Class 5)
Class 4 Married Individual – Both spouses are working employees
Class 5 Married Individual – Lower Earner (Higher earner in Class 3)
Class 6 Second employment


To calculate the best option available access: www.steuer.niedersachsen.de/Service/Stklwahlscript2007.htm

To calculate the salary after tax access: www.ofd.niedersachsen.de/master/C363370_N9581_L20_D0_I636.html

To calculate the annual income tax liability access:

Will foreign income in a different currency be taxed in Germany?

Regardless the currency or country where the income is coming from, the expat is taxable on his/her worldwide income in Germany.

Purposes for pension refunds for expats

  • The expat worked in Germany as an employee for less than 60 months.
  • During the time worked the expat paid into the German pension system.
  • The expat leaves and stays out of the EU for more than 24 months.

The money refunded will be tax free worldwide and does not prevent the expat from going back to Germany.  For more information on the German pension scheme please visit: www.deutsche-rentenversicherung-bund.de

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