The total amount of domestic and foreign wages is calculated after the tax-free amounts have been deducted and the taxable amounts have been added.
Example to illustrate: Your gross salary (domestic and foreign) is 85.000 Euro. Of your foreign salary, 5.000 Euro are tax-free. In addition, you have 3.000 Euro which are taxable under German law.
The total amount of domestic and foreign wages included in the tax calculation is 83.000 Euro.