Brutto and Netto: same paycheck, two very different moods. To understand the gap, you only need one distinction. Income tax and social insurance are two separate things. They're calculated differently, they pay for different things and they have different limits. 123
The short answer
- Gross pay is your pay before deductions. Net pay is what reaches your account.
- Two different things come off: taxes (wage tax, possibly solidarity surcharge and church tax) and social insurance (pension, unemployment, health and care).
- Your tax class changes the monthly wage tax. Your health fund, children and age change the contributions.
- A calculator that asks only for your gross salary cannot be accurate.
Brutto vs Netto: where the gap starts
Say your contract says €48,000 gross a year. Paid in 12 equal instalments, that's €4,000 gross a month. That number alone tells you nothing about your tax class, your health insurance or your net salary.
Taxes
- Wage tax, class I€524.50
- Solidarity surcharge€0.00
- Church tax (not a member)€0.00
Social insurance (your share)
- Pension 9.3%€372.00
- Unemployment 1.3%€52.00
- Health 7.3% + 1.45%€350.00
- Care 1.8% + 0.6%€96.00
The diagram is a teaching picture, not the exact order payroll software works in. The final transferred amount may differ from the displayed statutory net pay because of reimbursements, advances, benefits in kind or other entries.
Try it with imaginary numbers
Type a salary. Watch it split.
Your Netto. Out of every €1 in your contract, roughly 0 cents reach your account. The rest isn't lost. It pays for things you're already using, or will use later. Tap the other two parts to see what.
- Wage tax Lohnsteuer€0Your employer sends it to the tax office every month. Think of it as an advance on your yearly income tax. A tax return after the year ends can settle the difference.
- Solidarity surcharge Soli€0Most employees pay €0 these days. It only kicks in at higher wage tax amounts.
- Pension Rentenversicherung€0Earns you pension points in the state pension.
- Health Krankenversicherung€0Your public health insurance: doctors, hospital, medicine.
- Long-term care Pflegeversicherung€0Helps pay for care if you ever need it, because of age or illness.
- Unemployment Arbeitslosenversicherung€0Pays unemployment benefit (Arbeitslosengeld) if you lose your job and qualify.
Your employer pays its own share on top of your salary. You never see that part on your payslip.
Tax class I, statutory health insurance with the 2.9% average extra contribution, no church tax, no children, aged 23 or older, outside Saxony. Wage tax from the official 2026 formula of the Federal Ministry of Finance. Change tax class, church tax, children and more
The tax part of your payslip
Lohnsteuer: tax withheld from your wages
Your employer generally withholds Lohnsteuer on wages. Think of it as paying your income tax in advance, month by month. It's not an extra tax on top of your yearly Einkommensteuer. The calculation depends on your payroll characteristics and the statutory withholding method. 14
The 2026 basic income-tax allowance (Grundfreibetrag) is €12,348 for a person assessed under the basic tariff. That figure concerns taxable annual income, not the maximum gross salary you can earn without payroll withholding. 1
A tax class (Steuerklasse) affects how much wage tax is withheld each month. Your annual tax liability is ultimately determined under the applicable income-tax rules. A change in tax class may change your monthly take-home amount without creating an equivalent long-term tax saving. 4
Solidarity surcharge and church tax
The Solidaritätszuschlag is not charged in the same way for every employee; it depends on tax thresholds and calculation rules. Kirchensteuer generally depends on membership in a religious community entitled to collect it and on the applicable regional rules. So don't just take a fixed percentage off your gross salary for either. 4
The social insurance part, with the 2026 rates
For an ordinary employee subject to Germany's statutory system, the usual insurance branches are:
| Insurance | German term | General total rate in 2026 | Important detail |
|---|---|---|---|
| Pension | Rentenversicherung | 18.6% | Normally shared equally by employee and employer |
| Unemployment | Arbeitslosenversicherung | 2.6% | Normally shared equally |
| Health | Krankenversicherung | 14.6% standard | Additional fund-specific contribution on top, generally split equally |
| Long-term care | Pflegeversicherung | 3.6% base | Allocation and child-related supplements/reductions vary; Saxony differs |
The average additional health-insurance contribution (Zusatzbeitrag) published for 2026 is 2.9%, but your own Krankenkasse can charge a different amount. The table contains total rates, not the sum to be deducted entirely from an employee's pay. 23
Contribution ceilings
Rates do not apply indefinitely to higher wages. For 2026, the maximum monthly assessment bases are:
- €8,450 for general pension and unemployment insurance.
- €5,812.50 for statutory health and care insurance. 35
These are Beitragsbemessungsgrenzen, not limits on how much you are allowed to earn. A separate health-insurance compulsory-insurance threshold also exists and must not be confused with them. 25
Let's do the maths: €4,000 gross a month
Here's a hypothetical employee in October 2026 who:
- Is subject to the normal statutory employee contributions.
- Lives outside Saxony, is at least 23, and has no children.
- Is in statutory health insurance with a 2.9% additional contribution.
- Earns €4,000 monthly gross, below the contribution ceilings.
- Has no special insurance exemptions or employer arrangements.
| Employee-side deduction | Illustrative calculation | Monthly amount |
|---|---|---|
| Pension insurance | €4,000 × 9.3% | €372.00 |
| Unemployment insurance | €4,000 × 1.3% | €52.00 |
| Health insurance | €4,000 × (7.3% + 1.45%) | €350.00 |
| Long-term care | €4,000 × (1.8% + 0.6% childless supplement) | €96.00 |
| Employee social contributions | €870.00 | |
| Remaining before wage tax and other deductions | €4,000 − €870 | €3,130.00 |
€3,130 isn't the net salary yet. Wage tax is still missing. With tax class I, no church tax and no tax-free allowance on the tax card, the official 2026 wage-tax algorithm of the Federal Ministry of Finance gives €524.50 wage tax and €0 solidarity surcharge for €4,000 a month. 6 The estimated net salary is therefore €2,605.50.
The same gross salary gives very different monthly wage tax in other classes: about €201.83 in class III and €944.91 in class V. Those are monthly withholding amounts, not the final yearly tax. 46 Figures are illustrative and not a payslip quotation.
Want the nerdy details?The rules, the exact numbers and the edge cases. Open it whenever you're curious.- Decoding your payslip, line by line
- When your payslip won't match the example
- Will you get money back after the year ends?
Decoding your payslip, line by line
These abbreviations are where most of the confusion lives:
| On the payslip | English explanation |
|---|---|
| Brutto / Gesamtbrutto | Gross compensation, potentially including specific benefits or one-time payments |
| Steuerbrutto | Gross amount relevant for wage-tax purposes |
| SV-Brutto | Assessment base used for one or more social-insurance branches |
| LSt | Wage tax withheld |
| SolZ | Solidarity surcharge, where applicable |
| KiSt | Church tax, where applicable |
| RV | Pension insurance |
| AV | Unemployment insurance |
| KV | Health insurance |
| PV | Long-term care insurance |
| Nettoverdienst | Net compensation after stated payroll deductions |
| Auszahlungsbetrag | Actual amount paid after any further reimbursements or adjustments |
Check your Steuerklasse, health-insurance fund, pension-insurance indicator and child-related long-term-care insurance status. If something looks off, ask payroll to explain or correct it. That's a normal request.
When your payslip won't match the example
Private versus statutory health insurance
A privately insured employee may have premiums and employer subsidies processed differently. A percentage copied from the statutory system won't describe it correctly.
Multiple jobs
With a second employment relationship, tax-class VI can apply to wage withholding. A genuine Minijob under its special tax/social insurance rules is not necessarily treated as a normal second job. See the separate guides. 4
Children and care insurance
Long-term-care insurance contributions are influenced by whether you have children, how many qualifying children you have, and the rules applicable to the employee's region. A calculator that only asks 'children: yes or no' can't capture every case. 3
New to Germany?
Your tax ID (Steueridentifikationsnummer) and the electronic wage-tax characteristics (ELStAM) matter for correct withholding. Residence, family status, insurance arrangements and cross-border employment can affect what belongs on the payslip. If you work across borders, your case needs a closer look than any general example can give.
Will you get money back after the year ends?
Maybe, maybe not. The wage tax taken during the year can be higher or lower than your final income tax once your full year's income, deductions and family situation are assessed. So nobody can honestly promise that 'everyone gets tax back', or that a certain tax class always saves a fixed amount.
Questions we hear about payslips
Does the 2026 Grundfreibetrag mean that €12,348 of my gross salary is never taxed?
Not in that simplified form. The allowance relates to taxable income and statutory tax calculation, not gross salary directly. 1
Is €4,000 gross the same as €4,000 net?
No. Taxes and social contributions come off first.
Does my employer pay another full set of contributions?
Can I calculate my own net pay?
For a regular employee in statutory health insurance, yes: our Salary Breakdown uses the official 2026 algorithm. For bonuses, private insurance, Midijobs or second jobs, your payroll department has the exact figures.
Check yourself
Two colleagues earn the same Brutto, but one gets less Netto. Which of these could explain it?
Video lesson · In the makingReading a German payslip
Official sources
- BMF, 2026 income-tax tariff, §32a EStG
- Federal Ministry of Health, statutory health-insurance contributions, 2026
- Federal Ministry of Health, long-term-care insurance financing, 2026
- BMF, 2026 wage withholding under §39b EStG
- Federal Ministry of Labour and Social Affairs, 2026 social-insurance parameters
- BMF, Programmablaufplan for the 2026 wage tax (checked against the BMF wage tax calculator)
Last checked:
We explain how the German rules work in general. This isn't personal tax, legal or financial advice, and your bank, employer or tax office may treat your own case differently.