How is the tax calculated?
With SteuerGo, you can see at any time how your entries affect the expected tax refund or additional payment. Based on your information, a tax calculation is continuously created, giving you an insight into the expected tax assessment.
Compared to the official tax forms and the later tax assessment, the tax calculation in SteuerGo offers you additional information and evaluation options:
- Click on the amount of the expected tax refund or additional payment to view the individual calculation steps in detail.
- Many amounts and highlighted items contain further explanations and additional information.
- Through total values, you can access detailed calculation sheets with the underlying interim results.
- Clicking on the name of an item takes you directly to the corresponding entry page.
- For spouses, both joint and separate assessments are automatically calculated. This makes it easier to identify the most tax-efficient assessment method.
- Based on your information, you will receive hints on possible input errors and tips for tax optimisation.
Important: The displayed tax calculation is a forecast. Only the calculation and tax assessment of the relevant tax office are binding. Therefore, the actual tax refund or additional payment may differ from the values shown in SteuerGo.
How is the tax calculated?
What is the average tax rate?
The average tax rate indicates what percentage of your taxable income you pay as income tax in total.
It is calculated by dividing the income tax by the taxable income.
Example:
Your taxable income is 40.000 Euro. The income tax amounts to 7.200 Euro.
7.200 Euro ÷ 40.000 Euro × 100 = 18 %
Your average tax rate is therefore 18 %. This means that for every 100 Euro of taxable income, an average of 18 Euro goes to the tax office.
Important: The average tax rate applies to the entire income. It is usually lower than the marginal tax rate, which indicates the tax on an additional Euro earned.
What is the average tax rate?
What is the marginal tax rate?
The marginal tax rate indicates the rate at which each additional euro earned is taxed.
As income tax in Germany is progressive, the tax rate increases with higher income. Therefore, not all income is taxed at the same rate.
Example:
If you receive a salary increase of 1.000 Euro, the marginal tax rate shows how much tax is due on this additional amount. If your marginal tax rate is 35%, you will pay approximately 350 Euro in income tax on the additional 1.000 Euro.
Conversely, a reduction in income also affects the marginal tax rate: If you earn 1.000 Euro less, the tax is reduced by approximately 350 Euro.
Important: The marginal tax rate applies only to the additional part of the income. It is therefore usually higher than the average tax rate, which describes the tax burden on the entire income.
What is the marginal tax rate?
