How does changing jobs affect my tax bracket?
March 18, 2022 | 40,00 EUR | answered by Dirk Voigt
Dear tax advisor,
My name is Hilde Voigt and I am facing a job change. Currently, I am in tax class I, as I am single and have no children. However, my new employer has offered me a higher salary, which means that I will likely move to a higher tax class.
My main concern is to understand how this job change will affect my tax class. I am worried that I will have to pay more taxes as a result and would like to know if there are ways to avoid or at least minimize this.
Furthermore, I am interested in what specific steps I need to take to apply for the change of my tax class and if there are any deadlines to be aware of. I would like to know in advance what the impact of the job change will be on my financial situation so that I can prepare accordingly.
I would greatly appreciate it if you could provide me with detailed information on this matter and inform me of possible solutions. Thank you in advance for your help.
Sincerely,
Hilde Voigt
Dear Mrs. Voigt,
thank you for your question regarding tax classes. A change of job can indeed have an impact on your tax class and therefore on the amount of taxes you have to pay. If you are currently in tax class I and single without children, this means that you are currently classified in one of the lowest tax classes. With a higher salary, you might be classified into a higher tax class, such as tax class II or III.
In tax classes II and III, higher taxes are due compared to tax class I. This is because higher income is subject to a higher tax rate. However, it is important to note that the tax class only regulates advance payments and the actual tax burden is calculated at the end of the year. If you have paid too much taxes, you will receive a refund.
To calculate the effects of changing jobs on your financial situation more accurately, I recommend seeking advice from a tax advisor. They can perform a precise calculation and suggest possible solutions. There may also be tax planning opportunities to minimize your tax burden.
To apply for a change of your tax class, you need to submit an application to the tax office. For this, you will need the form "Application for Wage Tax Reduction" or "Application for Change of Tax Class for Spouses/Partners". There are no fixed deadlines for applying for a change of tax class, but I recommend doing so well in advance of starting your new job to avoid potential additional payments.
I hope this information is helpful to you. If you have further questions or wish for a detailed calculation, I am at your disposal.
Sincerely,
Dirk Voigt, Tax Advisor
