8 ms·

Anywhere in Germany? Our pre-tax income is pre-pre-taxed. Before your employer pays out your wage, they are taxed for it as well.

gambiting 1y ago
Well, correct me if I'm wrong - but according to this random website I found in 5 seconds of googling: https://www.expat.hsbc.com/expat-explorer/expat-guides/germany/tax-in-germany/ https://www.expat.hsbc.com/expat-explorer/expat-guides/germa... The highest band of income tax in Germany is 45% and obviously that's only on any amount over the threshold - so even if you make that much money your effective tax rate will be closer to 30% than 50%. So unless I'm missing something - I don't see how Germans could be paying 50% tax on their earnings?
- selfmodruntime 1y ago
  > Well, correct me if I'm wrong - but according to this random website I found in 5 seconds of googling: I will, because you are! Unfortunately, it's really easy because the German government applies a simple slight of hand. They call it a "gross employer contribution", which increases this band of income tax beyond the 45% you pay after the GEC. [1] It works like this: As your employer is paying your wage, amount X, they pay half of your contribution to social insurance companies. This so called "employer contribution" is subtracted before you are paid out your gross wage, amount Y, which you see on your pay slip. Now, on amount Y, you pay the other half of social insurance fees and taxes. Then you get your net, amount Z. Most sources you will find online will only talk about Y and what is subtracted to get to Z. But your employer pays your full wage for what your work is worth, and they of course are not as nice to gift your one half of social insurance payments to you. [1]: https://publikationen.bundesbank.de/publikationen-de/berichte-studien/monatsberichte/monatsbericht-juni-2024-932980?article=abgabenlast-auf-arbeitseinkommen-im-internationalen-vergleich-zum-unterschied-von-rentenbeitrag-und-steuerzahlung-932986 https://publikationen.bundesbank.de/publikationen-de/bericht...
  - gambiting 1y ago
    I mean sure, but does that actually add up to over 50% of your income? Here in the UK it works exactly the same as you described, but the NI is 10% of your income - even if you are in the highest band for incomne tax(also 45%) you wouldn't get to 50% overall, maybe if you make millions a year that average would start getting close to 50% (and if you do, congrats!) And can I comment on the fact that Germany seems to be incredibly generous with their bands - the 45% band only kicks in at 280k euro, so like maybe 0.00001% of all workers are in that band? Here in the UK you start paying 45% from £125k and up. Anyway - the reason why I'm asking is because UK taxes and social obligations seem to be crazy high as it is, but even they won't get you to 50% total, not unless you literally make millions in income per year.
    - selfmodruntime 1y ago
      No, it adds up to almost 50% of your wage. People who make millions of dollars (freelancers, company shareholders, etc) pay capital gains taxes of 25%. High earning people have capital, not a wage, either by way of company shares or asset payouts. They pay a tiny bit more tax and no social obligations You forget that the 42% band kicks in at 68000 (up until 280k) not 10k from the median wage. You pay this with 1.2% of the median wage, when in the distant past (around 1960) you had 42% at 15 times the median wage. They never changed these bands to adjust for inflation.
      - gambiting 1y ago
        >> People who make millions of dollars (freelancers, company shareholders, etc) pay capital gains taxes of 25%. High earning people have capital, not a wage, either by way of company shares or asset payouts. They pay a tiny bit more tax and no social obligations Yes, obviously - it works the same way here. You just said that "anywhere in Germany" you will pay 50% of your income in taxes, so I'm asking if your average worker actually pays that, or even a high earning IT worker/lawyer/doctor, or just somone who takes home millions in pay(not capital gains) so that the averages catch up. >>You forget that the 42% band kicks in at 68000 (up until 280k) not 10k from the median wage. I didn't forget, but like I said 3 comments earlier - your average will work out closer to 30% not 50%(I'd guess) because you only pay it on anything above the threshold, not on your entire income. Again, Germany seems very generous here - in the UK you start paying 40% once you cross £50k/pa.
Propelloni 1y ago
> Anywhere in Germany? Our pre-tax income is pre-pre-taxed. Before your employer pays out your wage, they are taxed for it as well. What? No. I'm an employer in Germany and I can tell you that's wrong.
- moooo99 1y ago
  People frequently hold remarkably strong opinions on a system they appear to have very little understanding about.
  - selfmodruntime 1y ago
    Yea, and it's the guy above ironically. If I add my net here [1], I can see that I land pretty much exactly at 49.7% of my wage being deducted from when my employer pays me to where it lands on my bank account. [1]: https://www.steuertipps.de/service/rechner/brutto-netto-gehaltsrechner-arbeitgeber https://www.steuertipps.de/service/rechner/brutto-netto-geha...
- selfmodruntime 1y ago
  Then you should really have a look at either your payroll or this simple calculator: https://www.steuertipps.de/service/rechner/brutto-netto-gehaltsrechner-arbeitgeber https://www.steuertipps.de/service/rechner/brutto-netto-geha...

gambiting 1y ago

Well, correct me if I'm wrong - but according to this random website I found in 5 seconds of googling: https://www.expat.hsbc.com/expat-explorer/expat-guides/germany/tax-in-germany/ https://www.expat.hsbc.com/expat-explorer/expat-guides/germa... The highest band of income tax in Germany is 45% and obviously that's only on any amount over the threshold - so even if you make that much money your effective tax rate will be closer to 30% than 50%. So unless I'm missing something - I don't see how Germans could be paying 50% tax on their earnings?

selfmodruntime 1y ago
> Well, correct me if I'm wrong - but according to this random website I found in 5 seconds of googling: I will, because you are! Unfortunately, it's really easy because the German government applies a simple slight of hand. They call it a "gross employer contribution", which increases this band of income tax beyond the 45% you pay after the GEC. [1] It works like this: As your employer is paying your wage, amount X, they pay half of your contribution to social insurance companies. This so called "employer contribution" is subtracted before you are paid out your gross wage, amount Y, which you see on your pay slip. Now, on amount Y, you pay the other half of social insurance fees and taxes. Then you get your net, amount Z. Most sources you will find online will only talk about Y and what is subtracted to get to Z. But your employer pays your full wage for what your work is worth, and they of course are not as nice to gift your one half of social insurance payments to you. [1]: https://publikationen.bundesbank.de/publikationen-de/berichte-studien/monatsberichte/monatsbericht-juni-2024-932980?article=abgabenlast-auf-arbeitseinkommen-im-internationalen-vergleich-zum-unterschied-von-rentenbeitrag-und-steuerzahlung-932986 https://publikationen.bundesbank.de/publikationen-de/bericht...
- gambiting 1y ago
  I mean sure, but does that actually add up to over 50% of your income? Here in the UK it works exactly the same as you described, but the NI is 10% of your income - even if you are in the highest band for incomne tax(also 45%) you wouldn't get to 50% overall, maybe if you make millions a year that average would start getting close to 50% (and if you do, congrats!) And can I comment on the fact that Germany seems to be incredibly generous with their bands - the 45% band only kicks in at 280k euro, so like maybe 0.00001% of all workers are in that band? Here in the UK you start paying 45% from £125k and up. Anyway - the reason why I'm asking is because UK taxes and social obligations seem to be crazy high as it is, but even they won't get you to 50% total, not unless you literally make millions in income per year.
  - selfmodruntime 1y ago
    No, it adds up to almost 50% of your wage. People who make millions of dollars (freelancers, company shareholders, etc) pay capital gains taxes of 25%. High earning people have capital, not a wage, either by way of company shares or asset payouts. They pay a tiny bit more tax and no social obligations You forget that the 42% band kicks in at 68000 (up until 280k) not 10k from the median wage. You pay this with 1.2% of the median wage, when in the distant past (around 1960) you had 42% at 15 times the median wage. They never changed these bands to adjust for inflation.
    - gambiting 1y ago
      >> People who make millions of dollars (freelancers, company shareholders, etc) pay capital gains taxes of 25%. High earning people have capital, not a wage, either by way of company shares or asset payouts. They pay a tiny bit more tax and no social obligations Yes, obviously - it works the same way here. You just said that "anywhere in Germany" you will pay 50% of your income in taxes, so I'm asking if your average worker actually pays that, or even a high earning IT worker/lawyer/doctor, or just somone who takes home millions in pay(not capital gains) so that the averages catch up. >>You forget that the 42% band kicks in at 68000 (up until 280k) not 10k from the median wage. I didn't forget, but like I said 3 comments earlier - your average will work out closer to 30% not 50%(I'd guess) because you only pay it on anything above the threshold, not on your entire income. Again, Germany seems very generous here - in the UK you start paying 40% once you cross £50k/pa.

Propelloni 1y ago

> Anywhere in Germany? Our pre-tax income is pre-pre-taxed. Before your employer pays out your wage, they are taxed for it as well. What? No. I'm an employer in Germany and I can tell you that's wrong.

moooo99 1y ago
People frequently hold remarkably strong opinions on a system they appear to have very little understanding about.
- selfmodruntime 1y ago
  Yea, and it's the guy above ironically. If I add my net here [1], I can see that I land pretty much exactly at 49.7% of my wage being deducted from when my employer pays me to where it lands on my bank account. [1]: https://www.steuertipps.de/service/rechner/brutto-netto-gehaltsrechner-arbeitgeber https://www.steuertipps.de/service/rechner/brutto-netto-geha...
selfmodruntime 1y ago
Then you should really have a look at either your payroll or this simple calculator: https://www.steuertipps.de/service/rechner/brutto-netto-gehaltsrechner-arbeitgeber https://www.steuertipps.de/service/rechner/brutto-netto-geha...