Every resident of Germany of working age pays two types of taxes from their official salary: social security contributions and income tax.
The amount of the latter varies depending on the salary level. The minimum salary of up to 9 thousand euros is not subject to tax. With an income of 9.1 to 18.3 thousand euros, Germans pay from 14 to 26% income tax, and with a salary over 53.3 thousand euros – 42%.
Social security contributions are paid regardless of the level of annual income. They are paid by the employer and employee in equal parts – 50 to 50. Contributions are distributed among four funds: pension, health insurance, insurance against possible loss of legal capacity (Pflegeversicherung) and unemployment. Pflegeversicherung insurance is intended to pay for a person’s stay in a nursing home. Depending on the expected level of care required for a person in the future, a flexible tax grid is provided. Since 2018, the percentage of collections for this type of tax has increased.