The classification into tax classes in Germany plays a decisive role in the level of tax burden. It helps to adapt the tax system to taxpayers’ individual life situations, thereby making it fairer. One of the most interesting and most frequently discussed variants is tax class IV, intended for married couples who live in a joint household. This article explains the special features, requirements, as well as possible advantages and challenges of this tax class. Enjoy reading!
Who is tax class IV intended for?
In tax class 4 all persons who enter into a marriage or a registered civil partnership are automatically classified. No separate application to the tax office is required – once the marital status is changed, you are automatically assigned to this group and all associated benefits apply immediately. However, this does not mean that you have no influence on your own situation – couples can choose other solutions, for example the combination of tax classes III and V or tax class IV with factor, by submitting a joint application.
In tax class IV both partners are treated in the same way for tax purposes, which is advantageous for couples where both spouses earn a similar income. However, if one spouse earns significantly more than the other, it may be advisable to consider the distribution into German tax classes III and V in order to optimize the tax burden.
Difference between tax class III and IV – the calculator helps with the choice
Even though both tax class III and tax class IV apply to married couples, there are some differences. The most important difference is that in tax class III one spouse benefits from lower tax rates, while the other is taxed at higher rates. In tax class IV, both spouses are taxed in the same way.
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Changing the tax class can be worthwhile if it significantly reduces your income tax. This decision makes particular sense if one spouse earns at least 60% of the joint household income — the greater the difference in income, the more advantageous the III/V combination becomes.
In summary: The greater the income difference between the spouses, the more attractive it is to classify the higher-earning partner in tax class III. Even if the second person in tax class V has a lower net income, this disadvantage is offset by the more favourable tax conditions in class III.
From my experience, you should not see tax class IV only as the automatic setting after getting married. If I were to recommend anything to working married couples in Germany, it would be above all to compare several variants: IV/IV, III/V and IV with factor. For similar incomes, tax class IV often proves effective, but with larger income differences another choice can lead to a better result – both in terms of monthly net salary and the annual tax return.
How high is income tax in tax class IV?
The progressive income tax rates for tax class IV increase as income rises. They start at 14% when income exceeds the set tax-free allowance of EUR 12,348 – they increase accordingly with higher income. The maximum tax rate of 42% applies from an income of EUR 69,879. For income above EUR 277,826, a tax rate of 45% applies. Detailed information on the tax rates is provided by the salary calculator of the Federal Ministry of Finance.
Which deductions apply in tax class IV?
In addition to income tax, every person employed in Germany in tax class IV must expect additional deductions from their salary. These include:
- Church tax – depending on the federal state, 8% or 9% of the income tax for membership in a particular church or religious community,
- Solidarity surcharge – the solidarity surcharge is levied on income tax, not on wages or profits – in 2026 it will not be levied if the annual income tax does not exceed EUR 20,350 for individual assessment or EUR 40,700 for joint assessment of married couples,
- Health insurance – the basic contribution rate for statutory health insurance is 14.6% of gross salary. In addition, there is an extra contribution, the amount of which depends on the respective health insurance fund – in 2026, the average additional contribution is 2.9%, so that the average total contribution to health insurance is around 17.5%.
- Pension insurance – the contribution to statutory pension insurance is 18.6% and is levied on monthly incomes up to EUR 8,450 in all federal states – the costs are shared between employer and employee.
Which tax allowances apply in tax class IV?
For persons in tax class IV there are various allowances that can reduce the tax burden. In 2026, the following amounts can be claimed:
- Basic tax-free allowance – 12,348 euros,
- Lump sum for income-related expenses – 1,230 euros,
- Lump sum for special expenses – 36 euros,
- Child allowance – 9,756 euros per child.
Tax class IV with factor
Even though tax class IV is advantageous for couples with similar incomes, for couples with significantly different incomes the factor method, introduced in 2010, may be the better choice. With tax class IV with factor, the distribution of income between the spouses – similar to the combination of tax classes III and V – is taken into account. However, the tax burden is distributed more evenly between both partners and reflects the actual ratio of their incomes.
The most important advantages are a more balanced distribution of the tax burden between the spouses and a lower risk of an additional tax payment in the annual tax return, which is often the case with the III/V combination.
It should be noted that married couples in tax class IV have great flexibility in changing their tax pattern – both to the III/V combination and to the factor method. It is also important that this change is even possible several times a year, depending on the current financial or personal situation. The application can be conveniently submitted online via ELSTER or directly to the tax office; the new tax class then applies from the first day of the month following the application.
How is the factor for tax class IV calculated?
Tax class IV with factor can be calculated using the calculator mentioned above – it is enough to enter the data of both partners and change the tax class. This allows you to compare the results and check whether this model is worthwhile compared to the conventional IV/IV or III/V split.
Sample calculation:
Let’s assume that one spouse earns €4,000 gross per month and the other €2,000 gross per month. With the standard combination IV/IV, both pay tax according to the same scale, which does not always realistically reflect the actual income distribution.
After applying the factor method, the tax office calculates a factor (e.g. 0.85 – the tax office calculates the actual factor on the basis of the expected annual incomes of both spouses), which is then applied to the advance wage tax payments for both persons. In practice, this means that:
- the person with the higher income pays slightly more tax than with IV/IV,
- the person with the lower income pays less,
- the total tax burden is brought more closely into line with the actual annual tax liability.
This avoids high additional payments when filing the tax return, which frequently occur with the III/V combination, while at the same time the income ratio between the partners remains more balanced.
Do I have to file a tax return in tax class IV?
Belonging to tax class IV alone does not automatically mean that you are obliged to submit an annual tax return to the German tax office. Other factors play a role, which we have described in detail in another article – Who has to file a tax return in Germany? Is it worth filing a tax return with tax class IV if there is no obligation? That depends on the individual situation, so you should check whether it is worthwhile in your specific case. However, filing a tax return is mandatory when using the factor method in order to take account of possible deviations in the forecast incomes.
If you need help with tax issues in Germany and with choosing the most beneficial tax class, be sure to use the Taxando tax return app. With the PREMIUM package, you can also rely on professional support from a tax advisor – try our program today!
FAQ
Who does tax class IV apply to in Germany?
Tax class IV applies to married couples and registered civil partners who live together and are not permanently separated. It is most frequently chosen when both persons are employed and have a similar income.
Is tax class IV assigned automatically after the wedding?
Yes, after getting married, spouses are usually automatically assigned to the IV/IV combination. If they want to choose the III/V combination or IV with a factor, they must submit an appropriate application to the tax office.
When is tax class IV advantageous?
Tax class IV is most advantageous when both spouses earn similarly high incomes. In this case, the advance tax payments are distributed more evenly and there are less often high additional payments with the annual tax return.
How does tax class IV differ from tax classes III and V?
In tax class IV, both spouses are taxed according to similar principles. In the III/V combination, the person with the higher income pays lower advance payments, while the person with the lower income bears a higher tax burden.
Do you have to file a tax return in tax class IV?
Tax class IV does not always mean an obligation to file a tax return. An obligation can arise in other situations, e.g. in the case of additional income, wage replacement benefits, or when applying the factor method.
What is tax class IV with factor?
Tax class IV with factor is a solution for married couples who want to align their advance tax payments more closely with their actual incomes. The factor is calculated by the tax office on the basis of the expected annual incomes of both spouses.
Does the factor method reduce the risk of an additional tax payment?
Yes, the factor method can reduce the risk of a high additional payment with the annual tax return. This is because the advance tax payments are calculated more realistically than with the classic III/V combination.
Can you switch the tax class from IV to III/V?
Yes, spouses can apply to change their tax class to the III/V combination. This solution is particularly worthwhile if one person earns significantly more than the other.
Does tax class IV affect the amount of net salary?
Yes, the tax class affects the amount of the monthly advance tax payments and thus also the net salary. However, this does not automatically mean a lower or higher annual tax, as the final settlement is made in the tax return.
Is it worth filing a tax return in Germany in tax class IV?
Yes, in many cases it is worth filing a tax return, even if there is no obligation. The assessment can make it possible to get back part of the tax, especially if the taxpayer had costs for commuting, accommodation, work, insurance, or other deductible expenses.
Maciej Wawrzyniak
In his private life, Maciej enjoys sporting challenges, playing the guitar, and swimming in the lake. He is also the proud father of three sons.
