Germany is one of the most attractive countries for IT professionals thanks to high salaries, strong social security, and a stable economy. However, before relocating or accepting a job offer, it’s important to understand how taxes in Germany work and how much of your gross salary you will actually take home.
This short guide explains the basics of German taxes for software developers, engineers, and IT specialists.
How Does the German Tax System Work?
Germany uses a progressive income tax system, which means the more you earn, the higher your tax rate. Taxes are automatically deducted from your salary by your employer.
For employees, the main deductions include:
- Income tax (Einkommensteuer)
- Solidarity surcharge (Solidaritätszuschlag) – mostly abolished, but still applies in some cases
- Social security contributions
As an IT professional, you don’t need to file monthly taxes yourself – everything is handled via payroll.Income Tax Rates in Germany (2025 Overview)
German income tax rates are progressive:
- 0% – income up to the basic tax-free allowance (Grundfreibetrag)
- 14%–42% – middle income range
- 45% – for very high incomes (so-called “rich tax”)
Most software engineers and developers fall into the 30–42% marginal tax bracket, but this does not mean you pay 42% on your entire salary.
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