Your Steuerklasse (tax class) determines how much income tax is withheld from your pay every month. Married couples and registered civil partners in Germany can choose between three combinations: III/V, IV/IV and the factor method (IV+Faktor). Our tax class calculator compares all three instantly and for free.

The Three Combinations at a Glance

Combination Partner 1 Partner 2 Best when …
III/V III (sole earner advantage) V (higher deductions) One partner earns significantly more
IV/IV IV IV Similar incomes, no risk of back-payment
IV+Factor IV × factor IV × factor Optimal withholding, no back-payment

Tax Class III/V: When Does It Pay Off?

The III/V combination has long been the most popular in Germany. The higher earner (partner 1) selects class III and benefits from a doubled basic tax-free allowance (Grundfreibetrag: €23,568 instead of €11,784) and a lower marginal rate. Partner 2 in class V pays more income tax with no basic allowance at all.

Example: Partner 1 earns €5,000/month gross, Partner 2 €2,000/month.

  • Class III for P1: low monthly withholding, high take-home pay
  • Class V for P2: high monthly withholding, lower take-home pay
  • Combined monthly net with III/V: higher than IV/IV

Caution: III/V often leads to a tax back-payment after the annual tax return, because monthly withholding does not reflect actual liability. Filing a tax return (Steuererklärung) becomes mandatory.

Tax Class IV/IV: Balanced and Safe

With IV/IV both partners are taxed individually using the same rules. This is fair when incomes are comparable and eliminates the risk of back-payments. If incomes differ substantially, IV/IV withholds more than necessary each month — but any overpayment is refunded via the annual tax return.

The Factor Method (IV+Faktor): The Precise Option

The factor method under §39f EStG combines the benefits of both approaches. The factor f is set so that the combined monthly withholding of both partners equals exactly the splitting-based tax liability:

f = splitting_tax / (tax_IV(P1) + tax_IV(P2))

Both partners then pay f × their_IV_tax each month. Because f is typically less than 1 (splitting is usually advantageous), monthly withholding falls — and there is no or only minimal back-payment at year-end.

Factor Calculation Example

Partner 1: €5,000/month, Partner 2: €2,000/month, no church tax:

  • Splitting tax (joint): ≈ €9,600/year
  • IV tax P1: ≈ €8,400/year, IV tax P2: ≈ €2,400/year
  • Factor f = 9,600 / (8,400 + 2,400) ≈ 0.889
  • P1 pays: 0.889 × €700/month ≈ €622/month income tax
  • P2 pays: 0.889 × €200/month ≈ €178/month income tax

The factor is applied for by submitting a joint request to the Finanzamt (tax office). It is valid for the calendar year and must be renewed annually.

Which Combination Is Best?

Quick rule of thumb:

  • III/V: One partner earns more than 60 % of combined income → higher monthly net, but back-payment risk
  • IV/IV: Similar incomes → no back-payment risk, simple
  • IV+Factor: Unequal incomes → optimal monthly withholding, no back-payment risk

For a precise comparison with your actual numbers, use our tax class calculator.

Changing Your Tax Class

Since 2020, multiple changes per year are allowed. File the request at your local Finanzamt — either via ELSTER (Germany's tax portal) or using the paper form "Antrag auf Steuerklassenwechsel".

Key moments to consider a change:

  • After marriage: switch from class I to III/V or IV/IV
  • Before parental leave: switch to III can increase Elterngeld, as the benefit is based on your net income in the 12 months before birth
  • When income changes significantly: re-check which combination is optimal

Parental leave tip: Elterngeld (parental allowance) is calculated from your net income. Switching to a more favourable tax class well before birth can increase your benefit substantially. See the parental allowance calculator for details.

Church Tax

Church tax (8 % in Bavaria and Baden-Württemberg, 9 % elsewhere) is levied on top of income tax. It applies in all three combinations and shifts with the underlying income tax amount. The gross-net calculator computes it for each partner individually.

Summary

The optimal Steuerklasse combination depends on your specific income split. Use the tax class calculator to compare all three options with your actual numbers. Remember: your tax class affects not only monthly net pay, but also Elterngeld, Arbeitslosengeld and other income-linked benefits.

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