De Payroll

Germany Payroll Tax (Lohnsteuer) -- Employee Skill v1.0

General reference only. This skill is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for any specific person's facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.

Section 1 -- Quick Reference

Grundfreibetrag and Tax Brackets (2025, from BMF PAP September 2025 revision)

Germany uses the BMF Programmablaufplan (PAP) formula, not simple bracket multiplication. The exact formula is in Section 3.

Solidaritatszuschlag (SolZ) on Lohnsteuer

Kirchensteuer (KiSt)

Steuerklassen (Tax Classes)

Key: ANP = Arbeitnehmer-Pauschbetrag (employee lump sum EUR 1,230); SAP = Sonderausgaben-Pauschbetrag (EUR 36); KFB = Kinderfreibetrag per child (EUR 9,600 full / EUR 4,800 half); EFA = Entlastungsbetrag fuer Alleinerziehende (EUR 4,260); KZTAB = tariff multiplier (1 = Grundtarif, 2 = Splittingverfahren); ZKF = number of child allowances.

Social Security Rates (2025)

Average Zusatzbeitrag (ZB) for 2025: 2.5% (varies by Krankenkasse). Total KV with average ZB = 17.1%.

Pflegeversicherung Detail (2025)

In Sachsen, the employee pays 0.5% more and the employer pays 0.5% less (Buss- und Bettag adjustment). For childless in Sachsen: AN = 2.9%, AG = 1.3%.

Beitragsbemessungsgrenzen (Contribution Ceilings, 2025)

Income above the BBG is not subject to contributions for that branch.

Conservative Defaults

Section 2 -- Required Inputs and Refusal Catalogue

Required Inputs

Minimum viable -- gross monthly salary (Bruttolohn), Steuerklasse, and pay period (monthly/weekly).

Recommended -- Zusatzbeitrag of specific Krankenkasse, number and ages of children, church membership, Freibetrag from ELStAM, KRV status, Sachsen residence.

Ideal -- full ELStAM data (electronic wage tax deduction characteristics), employment contract, prior Lohnsteuerbescheinigung.

Refusal Catalogue

R-DE-P-1 -- Self-employed / Freiberufler. "This skill covers employee payroll (Lohnsteuer). Self-employed persons compute Einkommensteuer, not Lohnsteuer. Use de-income-tax.md."

R-DE-P-2 -- Mini-job (geringfugige Beschaftigung). "Mini-jobs up to EUR 556/month have flat-rate taxation (2% pauschale Lohnsteuer or individual). Separate rules apply."

R-DE-P-3 -- Cross-border workers (Grenzganger). "Cross-border employment requires DBA analysis and potentially foreign social security. Escalate to Steuerberater."

R-DE-P-4 -- Board members / Geschaftsfuhrer of GmbH. "Managing directors have special social security rules. Escalate."

R-DE-P-5 -- Short-term employment (kurzfristige Beschaftigung). "Limited to 70 working days or 3 months per year. Special rules apply."

Section 3 -- BMF PAP Tax Formula (UPTAB25)

The following is the exact Einkommensteuer tariff formula from the BMF Programmablaufplan for 2025 (September 2025 revision), as implemented in MarcelLehmann/Lohnsteuer Lohnsteuer2025.java.

All values are annual. For monthly/weekly/daily payroll, the PAP annualises the pay period amount, computes annual tax, then divides back.

Formula (§32a EStG, 2025 PAP constants)

Input: X = zu versteuerndes Einkommen (taxable income) in EUR, whole euros
       GFB = 12,096

Zone 0 -- Grundfreibetrag:
  If X < GFB + 1 (i.e., X <= 12,096):
    ST = 0

Zone 1 -- Progressive zone 1 (14% entry rate):
  If 12,097 <= X < 17,444:
    Y = (X - 12,096) / 10,000
    RW = Y * 932.30 + 1,400
    ST = floor(RW * Y)

Zone 2 -- Progressive zone 2:
  If 17,444 <= X < 68,481:
    Y = (X - 17,443) / 10,000
    RW = Y * 176.64 + 2,397
    ST = floor(RW * Y + 1,015.13)

Zone 3 -- Proportionalzone (42%):
  If 68,481 <= X < 277,826:
    ST = floor(X * 0.42 - 10,911.92)

Zone 4 -- Reichensteuer (45%):
  If X >= 277,826:
    ST = floor(X * 0.45 - 19,246.67)

Final: ST = ST * KZTAB
  (KZTAB = 2 for Steuerklasse III Splitting; KZTAB = 1 for all others)

Steuerklasse V/VI Special Method (MST5_6)

Steuerklassen V and VI use a different computation per §39b Abs. 2 Satz 7 EStG. Instead of the standard UPTAB25, the PAP computes tax on 1.25x and 0.75x the income, takes the difference, doubles it, and applies a 14% minimum:

UP5_6(ZX):
  ST1 = UPTAB25(ZX * 1.25)
  ST2 = UPTAB25(ZX * 0.75)
  DIFF = (ST1 - ST2) * 2
  MIST = floor(ZX * 0.14)    -- minimum tax
  ST = max(DIFF, MIST)

The thresholds W1STKL5, W2STKL5, W3STKL5 create additional breakpoints:

Solidaritatszuschlag Formula (MSOLZ)

SOLZFREI = 19,950 * KZTAB
  (EUR 19,950 for Grundtarif; EUR 39,900 for Splitting)

If JBMG > SOLZFREI:
  SOLZJ = floor(JBMG * 5.5 / 100, 2 decimals)
  SOLZMIN = floor((JBMG - SOLZFREI) * 11.9 / 100, 2 decimals)
  SolZ = min(SOLZJ, SOLZMIN)
Else:
  SolZ = 0

JBMG = Jahresbemessungsgrundlage (annual Lohnsteuer for SolZ assessment,
        computed from Jahreslohnsteuer after §51a EStG adjustments)

The 11.9% phase-in rate ensures the SolZ increases gradually above the Freigrenze rather than jumping to 5.5%.

Vorsorgepauschale (Insurance Deduction in Tax Computation)

The PAP deducts a Vorsorgepauschale from gross income before computing Lohnsteuer. This is an approximation of the employee's social insurance contributions:

MPARA constants (2025):
  BBGRV = 96,600 (annual pension ceiling)
  RVSATZAN = 0.093 (employee pension rate)
  BBGKVPV = 66,150 (annual health/care ceiling)
  KVSATZAN = 0.07 + KVZ/200 (employee health rate: 7.0% base + half Zusatzbeitrag)
  KVSATZAG = 0.07 + 0.0125 (employer health rate for Vorsorgepauschale: 8.25%)
  PVSATZAN = 0.018 (employee care rate, non-Sachsen; 0.023 Sachsen)
  PVSATZAG = 0.018 (employer care rate, non-Sachsen; 0.013 Sachsen)

VSP1 = min(annual_gross, BBGRV) * RVSATZAN
VSP2 = min(annual_gross * 0.12, VHB)
  VHB = 3,000 (Stkl III) or 1,900 (others)
VSP3 = min(annual_gross, BBGKVPV) * (KVSATZAN + PVSATZAN)
VSP = max(VSP1 + VSP2, VSP1 + VSP3)

Section 4 -- Social Security Computation (Employer Payroll)

4.1 Monthly Payroll Social Security Deductions

For each employee, the employer computes contributions on assessment_base = min(gross_monthly, BBG):

Branch          | Rate (AN) | Rate (AG) | BBG monthly  | Max AN/month | Max AG/month
----------------|-----------|-----------|------------- |------------- |-------------
RV (Pension)    |  9.30%    |  9.30%    | EUR 8,050.00 | EUR 748.65   | EUR 748.65
KV (Health)     |  7.30%+ZB/2 | 7.30%+ZB/2 | EUR 5,512.50 | varies    | varies
PV (Care)       |  varies   |  1.80%    | EUR 5,512.50 | varies       | EUR 99.23
AV (Unemploymt) |  1.30%    |  1.30%    | EUR 8,050.00 | EUR 104.65   | EUR 104.65

With average ZB = 2.5%:

• KV employee: 7.3% + 1.25% = 8.55% of min(gross, 5,512.50) → max EUR 471.32/month
• KV employer: 7.3% + 1.25% = 8.55% of min(gross, 5,512.50) → max EUR 471.32/month

4.2 Total Maximum Monthly Deductions (at or above all ceilings)

4.3 Employer-Only Contributions (not deducted from employee)

Section 5 -- Worked Examples

Example 1 -- Steuerklasse I, EUR 4,000/month, no church, childless

Input: Brutto EUR 4,000/month, Stkl I, R=0, PVZ=1, KVZ=2.50%, KRV=0, PVS=0

Lohnsteuer computation (annualised):

• Annual gross = EUR 48,000
• Less ANP (1,230) + SAP (36) + Vorsorgepauschale
• VSP1 = 48,000 x 0.093 = 4,464
• VSP3 = 48,000 x (0.07 + 0.0125 + 0.018 + 0.006) = 48,000 x 0.1065 = 5,112
• VSP = max(4,464 + 1,900, 4,464 + 5,112) = max(6,364, 9,576) = 9,576
• ZVE = 48,000 - 1,230 - 36 - 9,576 = 37,158
• UPTAB25(37,158): Zone 2: Y = (37,158 - 17,443)/10,000 = 1.9715; RW = 1.9715 x 176.64 + 2,397 = 2,745.25; ST = floor(2,745.25 x 1.9715 + 1,015.13) = floor(6,425.96) = 6,425
• Monthly LSt = floor(6,425 x 100 / 12) / 100 = EUR 535.41/month (approximate)

SolZ: JBMG = 6,425 < SOLZFREI 19,950 → SolZ = EUR 0

Social security:

• RV: 4,000 x 9.3% = EUR 372.00
• KV: 4,000 x 8.55% = EUR 342.00
• PV: 4,000 x 2.4% = EUR 96.00
• AV: 4,000 x 1.3% = EUR 52.00
• Total SV (AN): EUR 862.00

Approximate net: 4,000 - 535 - 0 - 0 - 862 = EUR 2,603/month

Example 2 -- Steuerklasse III, EUR 6,000/month, church (Bavaria), 2 children

Input: Brutto EUR 6,000/month, Stkl III, R=1 (church, 8% Bayern), ZKF=2.0, PVZ=0, PVA=1, KVZ=2.50%

Lohnsteuer (annualised):

• Annual gross = EUR 72,000
• KZTAB = 2 (Splitting)
• KFB = 2.0 x 9,600 = 19,200
• ZVE after deductions and Vorsorgepauschale: computed per PAP
• X = ZVE / 2 (Splitting)
• Apply UPTAB25 to X, then ST = ST x 2
• Result: significantly lower than Stkl I due to Splitting

Social security (2 children):

• RV: 6,000 x 9.3% = EUR 558.00 (under RV-BBG)
• KV: 5,512.50 x 8.55% = EUR 471.32 (capped at KV-BBG)
• PV: 5,512.50 x 1.55% = EUR 85.44 (2 children, PVA=1)
• AV: 6,000 x 1.3% = EUR 78.00
• Total SV (AN): EUR 1,192.76

Example 3 -- Steuerklasse VI (second job), EUR 1,500/month

Input: Brutto EUR 1,500/month, Stkl VI, R=0

Lohnsteuer: No ANP, no SAP, no KFB, no FVBZ. Higher effective rate since no allowances are applied. MST5_6 method may apply depending on income level.

Social security: Normal rates apply. If already at BBG from primary employment, no additional contributions.

Section 6 -- Payslip Transaction Pattern Library

6.1 Payslip Credits (Employee receives)

6.2 Employer Deductions (visible on payslip, debited from gross)

Section 7 -- Key PAP Input Parameters Reference

These are the input parameters to the BMF Programmablaufplan, as defined in the MarcelLehmann/Lohnsteuer Lohnsteuer2025.java (generated from official BMF PAP XML, Stand: 2025-09-17):

Key Output Parameters

Section 8 -- Sonstige Bezuege (Bonuses, One-Time Payments)

Sonstige Bezuege (bonuses, severance, holiday pay) are taxed separately per §39b Abs. 3 EStG. The PAP:

1. Computes annual Lohnsteuer on regular pay alone (Jahresarbeitslohn)
2. Computes annual Lohnsteuer on regular pay + sonstiger Bezug
3. The difference is the tax on the sonstiger Bezug

This prevents the progressive rate from being distorted by one-time payments.

For Entschadigungen/Abfindungen, the Funftelregelung (§34 EStG) may apply:

• Compute tax on 1/5 of the Abfindung added to regular income
• Multiply the incremental tax by 5
• This smooths the progressive effect

Section 9 -- Mini-Jobs and Gleitzone (Midijobs)

Mini-Jobs (Geringfugige Beschaftigung)

Midijobs / Uebergangsbereich (Gleitzone)

Section 10 -- Test Suite

Test 1 -- Stkl I, 4,000 brutto, childless, no church. Input: STKL=1, RE4=400000 (cents), LZZ=2, R=0, KVZ=2.50, PVZ=1, KRV=0, PKV=0. Expected: LSTLZZ approximately EUR 535 (monthly Lohnsteuer in cents). SOLZLZZ = 0 (below Freigrenze). BK = 0. SV deductions: RV=372, KV=342, PV=96, AV=52 = EUR 862/month.

Test 2 -- Stkl III, 6,000 brutto, 2 children, church 8% (Bayern). Input: STKL=3, RE4=600000, LZZ=2, R=1, ZKF=2.0, PVZ=0, PVA=1, KVZ=2.50. Expected: Significantly lower LSt due to Splitting. KiSt = BK x 8%. SV: RV=558, KV=471.32, PV=85.44, AV=78 = EUR 1,192.76/month.

Test 3 -- Stkl V, 2,500 brutto, childless. Input: STKL=5, RE4=250000, LZZ=2, PVZ=1, KVZ=2.50. Expected: Higher LSt than Stkl I due to MST5_6 method with 14% minimum.

Test 4 -- Above all BBGs, Stkl I, 10,000 brutto. Input: STKL=1, RE4=1000000, LZZ=2, PVZ=1. Expected: RV capped at 748.65, KV capped at 471.32, PV capped at 132.30, AV capped at 104.65.

Test 5 -- SolZ phase-in. Input: Annual LSt = EUR 20,500, single. Expected: SOLZFREI = 19,950. SOLZJ = 20,500 x 5.5% = 1,127.50. SOLZMIN = (20,500 - 19,950) x 11.9% = 65.45. SolZ = min(1,127.50, 65.45) = EUR 65.45.

Test 6 -- Validate against BMF online calculator. All computations should match bmf-steuerrechner.de using the same inputs. The MarcelLehmann/Lohnsteuer test suite validates against this API.

Section 11 -- Interaction with Other German Skills

PROHIBITIONS

• NEVER compute Lohnsteuer using simple bracket percentages -- use the PAP formula (UPTAB25)
• NEVER apply Grundtarif (UPTAB25) directly to Steuerklasse V or VI -- use the MST5_6 method
• NEVER forget the Vorsorgepauschale deduction before computing Lohnsteuer
• NEVER confuse the KV/PV-BBG (EUR 5,512.50/month) with the RV/AV-BBG (EUR 8,050/month)
• NEVER apply the childless PV surcharge to employees with children
• NEVER charge social security contributions above the Beitragsbemessungsgrenze
• NEVER omit the Sachsen PV exception when the employee is in Sachsen
• NEVER treat sonstige Bezuege (bonuses) as regular pay -- use the PAP's separate method
• NEVER assume Kirchensteuer is 9% everywhere -- Bavaria and Baden-Wurttemberg use 8%
• NEVER present payroll computations as definitive -- direct to Steuerberater/Lohnbuchhalter for sign-off

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a Steuerberater or Lohnbuchhalter in Germany) before implementation.

The PAP formula and constants are sourced from the MarcelLehmann/Lohnsteuer repository (Apache-2.0), which generates code from the official BMF Programmablaufplan XML. The BMF publishes the PAP at bmf-steuerrechner.de.

The most up-to-date, verified version of this skill is maintained at openaccountants.com. Log in to access the latest version, request a professional review from a licensed accountant, and track updates as tax law changes.

Source: OpenAccountants — open tax Guides for AI, reviewed by named CPAs/CAs/EAs. Quality: source-cited draft. For always-current figures and named-accountant backing, connect the OpenAccountants MCP server (openaccountants-mcp).