As of: February 22, 2024, 12:30 p.m
By: Marco Blanco Ucles
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Press
Split
There is movement in the tax bracket debate.
According to a media report, tax classes III and V will soon be eliminated - and merged.
The topic is not new: when the traffic light government drew up its coalition agreement in 2021, it was agreed on the change that tax classes III and V would no longer apply in the future and those affected would all be classified in tax class IV.
Nothing has officially happened so far (as of February 22, 2024).
But now the topic is moving.
Finance Minister Christian Lindner (FDP) wants to present a comprehensive legislative package as quickly as possible.
This is
reported by
bild.de.
Higher-earning partners are currently often classified in tax class III
Tax classes III and V include previously married people, people in a registered civil partnership and widowed people in the year of the partner's death and in the following year.
The system is clear: the higher-earning partner was placed in tax class III, in which he has to accept small deductions.
In tax class V, on the other hand, the partner with the lower salary is the one with higher taxes.
A lot will change in the future for couples who were previously registered in tax classes III or V.
© Marco Blanco Ucles/DALL-E (AI generated)
In the future, however, these two groups will be merged into tax class IV.
What does that mean specifically?
The regulations for the individual tax classes are clearly defined.
Both Class IV spouses are subject to unlimited income tax.
So far, this tax bracket has mainly been used by couples where the income of each partner is approximately the same.
The basic allowance in tax class IV is 23,208 euros.
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But what exactly will change for people who will move from tax classes III or V to group IV in the future?
Based on various gross salaries and with the help of a gross-net calculator from
steuertipps.de
, you can find the wage tax contributions in the different tax classes in our table.
When calculating, we assume that the spouses have no children and live in Baden-Württemberg.
Payroll tax calculation in the different tax classes
Gross salary |
Tax class III |
Tax class V |
Tax class IV |
|---|---|---|---|
2,000 euros |
0 euros |
322.41 euros |
110.91 euros |
2,500 euros |
0 euros |
491.58 euros |
208.41 euros |
3,000 euros |
60.50 euros |
643.83 euros |
317.08 euros |
3,500 euros |
142.66 euros |
803.50 euros |
432.75 euros |
4,000 euros |
239.33 euros |
972.25 euros |
555.58 euros |
4,500 euros |
340.16 euros |
1,141.41 euros |
685.41 euros |
5,000 euros |
444.50 euros |
1,310.58 euros |
822.25 euros |
As the
Taxpayers Association
explains, in a marriage the higher earner will receive slightly less net income in the future, while the partner with the lower salary will receive slightly more.
It is important for politicians to emphasize that couples will not receive less net income overall as a result of the regulation.
“The highest priority is that the bottom line is that the switch does not lead to any additional burdens on married couples,” explains FDP financial expert Max Mordhorst to
Bild
.
When the innovations will be officially launched or introduced is anyone's guess.
According to
Bild
, this also depends on how quickly the Ministry of Finance can revise the IT responsible for this.