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New to money in Germany? Good. This page is for you.
You don't need to know what a Depot, a Steuerklasse or a Vorabpauschale is. By the end of this path, you will. Take it one step at a time. Skip whatever you already know.
Is this for someone like me?
- You live in Germany, or you're about to.Arrived last month or ten years ago, it doesn't matter.
- Nobody really explained the system to you.Not at school, not at work, not in English.
- You want to understand it, not become an expert.Enough to read your own documents and ask good questions.
Then yes. And if you grew up here and still find it confusing, you're welcome too. That's more common than you'd think.
The beginner path
Six steps, from your first payslip to your pension.
Each step is one guide with something to click. Inside, a small bar shows where you are, so you can stop and come back later.
Begin with step 1- 1Your payslip: Why is my Netto lower than my Brutto?You can read your payslip and say where each euro went.9 min
- 2Your tax class: What does my Steuerklasse change?You'll know why it changes your monthly pay but not your final yearly tax.8 min
- 3Bank account vs Depot: Where does my money go when I invest?You'll know your Girokonto from your cash account and your Depot.16 min
- 4What an ETF is: What would I actually own?You'll know what's inside a fund, what it costs and why spreading out helps.6 min
- 5How investments are taxed: How much tax on an ETF gain?You can estimate the tax on a gain yourself, in the right order.7 min
- 6Your state pension: What is every payslip paying into?You'll understand the pension letter and your own timeline.10 min
Got something specific?
Or jump to what's on your mind.
Your contract says one number. Your bank account says another.
Nothing went missing. It went to tax and social insurance, and most of it pays for things you already use. Here's the route we'd take.
You've got some money put aside, and everyone keeps saying “ETF”.
We won't tell you what to buy. We'll show you how the usual options work, so you can decide with your eyes open. Most people start with what an ETF actually is.
Steuerklasse, Finanzamt, Freistellungsauftrag. Fair enough.
Even Germans get help with this. Start with the two taxes you'll meet first: the one on your salary and the one on investments.
Every payslip pays into it. The letter they send you is famously hard to read.
Here's the short route: how the state pension works, what your own timeline looks like and how to check the gap.
Bank account, cash account, Depot, ETF. Four places, one app.
It helps to know which is which before you open an account. It also explains what's protected and what isn't.
The German money dictionary
German glues words together. Here are the ones on your money.
Tap a word for its meaning in plain English. The literal translation is free, and occasionally the best part.
24 words
Brutto is your salary in the contract. Netto is what reaches your account after tax and social insurance.
Income tax your employer takes off every month and sends to the tax office. An advance on your yearly income tax.
Classes I to VI. They decide how much wage tax is withheld each month, not how much you owe in the end.
Your local tax office. If a letter comes from the Finanzamt, open it the same day.
Your personal 11-digit tax identification number. You keep it for life, even if you move.
Your yearly tax return. It settles the difference between what was withheld and what you actually owe.
Pension, health, long-term care and unemployment insurance. You and your employer share the cost.
Your public health insurer. Each one sets its own extra contribution (Zusatzbeitrag).
8% or 9% of your income tax, depending on the state. Only for registered members of churches that collect it.
A 5.5% surcharge on some taxes. Most employees no longer pay it on their salary, but it still applies to investment tax.
Your everyday bank account. Salary in, rent out.
Your securities account, where your ETFs and shares are recorded. Short for Wertpapierdepot.
The cash account linked to your Depot. Money waits here before it buys something.
An automatic monthly purchase of an ETF. Set it once, it keeps buying.
The flat 25% tax on investment income. Your German bank usually takes it off for you.
Your first €1,000 of investment income per year is tax-free (€2,000 for jointly assessed couples).
The form that tells your German bank to apply your €1,000 allowance automatically.
Part of your fund income is tax-free: 30% for equity funds, 15% for mixed funds.
A small yearly tax on funds that pay out little, charged before you sell. It's deducted from your gain when you do sell, so nothing is taxed twice.
The state pension system. 18.6% of your gross salary in 2026, split between you and your employer.
Pension points. A year at the average salary earns about one point.
The yearly letter from the Deutsche Rentenversicherung with your pension estimate. Starts from age 27, after five years of insurance periods.
The new state-subsidised retirement investment account from 2027. Yes, it's one word.
Property transfer tax when you buy a home. The rate depends on the federal state.
A few ground rules, so you know what you're reading
- We explain, you decide. We show how the German system works. We don't tell anyone which product to buy, and we're not financial advisers.
- Examples use made-up people and imaginary money. The rules they run into are real, and the assumptions are always shown.
- Every legal number has a source, with the date we last checked it.
- Investing can lose money. We'll keep saying it, because it's true.
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