Paying your taxes
If you have a contract of employment with Saarland University or one of the on-campus research institutes, you will pay regular tax and social insurance contributions. About six to eight weeks after registering at the Residents' Registration Office (Bürgeramt), you will be sent a letter with your tax identification number (TIN), which you should communicate to the university's Human Resources Department. The amount of tax you pay will depend on the amount you earn, your marital status and your tax bracket. Income tax is withheld by Saarland University as your employer and transferred directly to the tax authorities.
Grants and scholarship
If your stay is based on a scholarship, you are in principle not subject to German income tax, provided that the following conditions apply:
- The scholarship is provided by public or non-profit organizations.
- The scholarship is for scientific or artistic education.
- The scholarship does not exceed the amount normally required.
- The donation is based on the usual rules of the scholarship provider.
- The scholarship does not include any service obligation of the beneficiary.
- However, in particular with scholarships of foreign donors, it should be noted that there may be a tax liability in the respective donor or in your home country.
If you are gainfully employed and you belong to a church that is officially recognized in Germany, you will have to pay church tax. Officially recognized churches include the Roman Catholic and Protestant churches and the Jewish religious community. Members of the Eastern Orthodox churches or the Muslim religious community do not pay church tax. If you are a member of a church, you must specify the church to which you belong when registering at the Residents' Registration Office. Church tax is charged at a rate of about 9% of your income tax.
Filing an annual tax return
After each calendar year, you can file a tax return. If your income is based solely on gainful employment, you are not required to file a tax return. However, filing such can in many cases result in a refund of overpaid tax. You will receive the application forms required in each tax office or in your town hall. We recommend that you enquire about and observe the deadline for submission for your tax return. You can also complete the German tax forms from your home country if you have already returned home. Once the tax office has processed your tax return, you will be issued with a tax assessment notice (Steuerbescheid) stating the size of your tax refund.
Since the filing of a tax return is for laymen not a straightforward undertaking, it is advisable to consult a tax adviser - “Steuerberater”. The fee depends on the amount of your taxable income. On the homepage of the German tax consultant association is a list of all German tax consultants.
Alternatively, you can have your tax return done by a tax advisor association - “Lohnsteuerhilfeverein”. However, they require membership. Depending on association and your income the membership fee will be between 30,00 € to 350,00 €.
Double taxation agreement
To prevent foreigners simultaneously paying tax in both Germany and their home country, Germany has double taxation agreements with several countries. To find information about your country, please go to the Federal Ministry of Finance website.
If you are in Germany for less than three months, you will be subject to taxation by your home country, provided that you work for a foreign employer and the right to tax has been granted to your home country in relevant agreements. If this does not apply, your salary is taxed by the German tax authorities. However, university examiners and researchers in particular are also provided with derogations in some agreements.
What amount of taxes do I have to pay?
The amount of the tax deducted depends on your marriage status, the amount of your salary and your tax code. In Germany there are six tax codes. Your tax code is in your payroll statements, which you get from the employer. if needed (for example after a marriage) you can apply for a change of tax class. Please contact the tax office responsible for you to do this.
As an employee, you pay income tax which is deducted from your salary. This is composed as follows:
- income tax
- solidarity surcharge
- possibly church tax
- social security
Social security contributions are not taxes in the strict sense of the term, but they are compulsory insurances. Half of the costs are borne by the employees, the other half by the employers.