Changing tax class

Which tax class combination is best for you as a couple in Germany?

Combination III/V:

• Partner with the higher income: class III (low deductions)
• Partner with the lower income: class V (high deductions)
• Advantage: more net pay in total each month
• Disadvantage: often a back payment with the tax return, lower parental allowance for the partner in V

Combination IV/IV:

• Both partners: class IV (same deductions as class I)
• Advantage: no surprises, fair distribution
• Disadvantage: slightly less net pay each month than with III/V

Combination IV/IV with factor:

• The tax office calculates an individual factor
• Advantage: the most accurate monthly tax burden, hardly any back payments/refunds
• Disadvantage: somewhat more complicated

Tip before parental leave: switch to class III at least 7 months before maternity leave – increases the parental allowance by €200–400/month!