Attention to the tax class – refugees in work

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More and more refugees are finding work in Germany, which is a positive step both for those affected and for society as a whole. But there are some bureaucratic pitfalls that should be considered, especially when it comes to the right tax bracket.

A common mistake occurs when employers make a query via the Elster system and refugees are incorrectly classified in tax class 1. This happens even though they are registered with the city of Leichlingen as a family with children. In tax class 1, they are calculated as unmarried and childless, which can lead to significantly higher tax deductions. The child allowances are also not taken into account.

If this affects you, please contact us or go directly to the citizen service to have your entries checked. The data is transmitted digitally from the residents’ registration office to the tax office. Sometimes incorrect or incomplete information, such as a missing marriage date at the residents’ registration office, means that the tax office cannot process it correctly.

Even if the data is correct, tax class 4 is often applied to families by default for both partners. To avoid financial disadvantages, you should have this changed quickly. The tax office provides the appropriate forms online. You can also contact us here, we will be happy to support you.

If only one parent works and the other takes care of the children, the working parent should choose tax class 3 and apply for the child allowances. This leaves more net of gross at the end of the month.

Also remember that you are also entitled to citizen’s allowance, child allowance, housing allowance and other support benefits while working if your salary is not enough to live on. We at Leichlingen Hilft will be happy to support you in checking and using your claims.

Here is a sample calculation for a person with a gross income of 2,500 EUR per month, depending on the tax bracket. The calculation assumes that the person lives in Germany and does not pay church tax.

Tax class 1 (single, without children)

  • Gross income: 2,500 EUR
  • Income tax: 330 EUR
  • Pension insurance: 232.50 EUR
  • Health insurance: 182.50 EUR
  • Long-term care insurance: 38.13 EUR
  • Unemployment insurance: 30 EUR
  • Net earnings: 1,686.88 EUR

Tax class 3 (married, partner without income, 2 children)

  • Gross income: 2,500 EUR
  • Income tax: 95 EUR
  • Pension insurance: 232.50 EUR
  • Health insurance: 182.50 EUR
  • Long-term care insurance: 38.13 EUR
  • Unemployment insurance: 30 EUR
  • Net earnings: 1,921.88 EUR

Tax class 4 (married, both partners work, 1 child each)

  • Gross income per person: 2,500 EUR
  • Income tax: 237.50 EUR
  • Pension insurance: 232.50 EUR
  • Health insurance: 182.50 EUR
  • Long-term care insurance: 38.13 EUR
  • Unemployment insurance: 30 EUR
  • Net earnings per person: 1.779,38 EUR

Conclusion:

  • In tax class 1, EUR 1,686.88 net remains.
  • In tax class 4, the net earnings are EUR 1,779.38.
  • In tax class 3, the net earnings increase to EUR 1,921.88.

These examples show how the choice of tax bracket and the consideration of children affect monthly income.

It is therefore important to choose the right tax bracket to avoid unnecessary deductions.