How much you pay in Germany depends on how you earn, so here are all three pictures: an employment contract, self-employment and running your own company. Real headline rates, verified July 2026.
As an employee
Income tax: Progressive 14-45% (+5.5% solidarity above thresholds, church tax optional). Social contributions: ~20-21% employee.
Joint filing (Ehegattensplitting) meaningfully helps single-earner couples. Rates as of July 2026. Tax rules change every budget cycle and depend on your personal situation: verify with a licensed tax advisor before acting.
As a freelancer or sole trader
Income tax: Same brackets on profit; no flat regime. Social contributions: Own health insurance ~15-20% of profit (capped); pension optional for most.
Kleinunternehmer status only simplifies VAT, it is not an income-tax break. Rates as of July 2026. Tax rules change every budget cycle and depend on your personal situation: verify with a licensed tax advisor before acting.
As a company owner
~29.9% effective (15% CIT + solidarity + ~14-17% municipal trade tax). Dividends 26.375% incl. solidarity.
Trade tax varies by municipality, so the town you register in changes the rate. Rates as of July 2026. Tax rules change every budget cycle and depend on your personal situation: verify with a licensed tax advisor before acting.
Two rules that apply everywhere
Tax residence usually follows your life, not your paperwork: spend 183+ days in Germany (or keep your centre of vital interests there) and you generally owe taxes there regardless of visa or company setup.
Special regimes and treaty rules can change these numbers dramatically in both directions. This page is educational information, not tax advice: before you commit to a structure, have a licensed Germany tax advisor confirm the current rules for your specific case.