Free calculator estimates German income tax for expats with foreign income

Many expats calculate their expected German income taxes online, only to be surprised by a higher bill from the German tax office because of foreign income. Standard online tax calculators can provide misleading results for international income.

Basic German wage tax calculators were built for a simple case: One German employer, one salary, no income from abroad, no international complexities. For expats, that picture rarely matches reality because they move mid-year, often have foreign financial investments, pensions and rental income or other cross-border income.

Prinz.tax has built the free German Income Tax Calculator in English based on many years of experience advising international clients and listening to recurring feedback. This tool was tailored to help international clients see a realistic estimate of their German income tax, social security contributions and investment tax, based on their personal situation rather than a generic template limited to German employment income. The calculator has now been updated for the tax year 2026!

What the German Income Tax Calculator estimates

To allow a reliable tax calculation, several layers of income should be considered because Germany generally taxes expats with tax residence on their worldwide income.

Rental income, for example, is usually not subject to social security contributions but increases your German income tax. Certain foreign income may be exempt from direct taxation in Germany under a tax treaty or specific exemption under German tax law. Usually, you should include such income because it affects the tax rate expats need to pay on income subject to direct taxation in Germany.

The German income tax calculator works through the parts of an expat's tax picture that can be modelled reliably and transparently.

• German employment income and social security: Gross salary is run through the progressive German income tax scale together with the mandatory social security contributions for health, pension, nursing care and unemployment insurance, so you see your actual net income rather than a rough percentage.
• Side income, freelance work and rental income: Income outside standard employment, such as freelance work or rental income, is added to your overall taxable income and taxed at your personal progressive income tax rate.
• Investment income: Interest, dividends and capital gains are calculated at the flat German investment tax rate plus solidarity surcharge and, where applicable, church tax.
• Foreign income under a double tax treaty: Where a tax treaty exempts foreign income from German tax but subjects it to the progression clause (Progressionsvorbehalt), the calculator correctly reflects your exempt income in the tax rate applied to your German income.

Where a calculator stops and a tax advisor should step in

A tool is only useful if it is honest about its limits. Several situations that come up regularly with international clients cannot be reduced to a simple tax calculation and need an individual tax review, for example:

• Restricted stock units and (foreign) equity compensation: The timing and German tax treatment of RSUs, stock options and similar packages from a foreign employer depend on the specific plan and on when and where the shares vested.
• Foreign pensions and retirement benefits: Depending on the type of foreign pension, payments can be treated as taxable German income or as tax-exempt foreign income.
• International investment portfolios: Complex situations, such as partial tax exemptions for investment funds (Teilfreistellung), offsetting losses against gains (Verlustverrechnung), or taxes on unrealised gains (Vorabpauschale) for certain funds and ETFs.

Other German tax law limitations apply. Rather than guessing these numbers, Prinz.tax recommend seeking individual tax advice.

Want to calculate your tax rate before moving to Germany?

Try the free Prinz.tax German Income Tax Calculator to get a better understanding of your German income taxes, including your personal tax rate.

The German Income Tax Calculator gives you a realistic starting number, whether you are comparing a job offer, planning a move to Germany or preparing for your annual tax declaration. If you need assistance with your German tax declaration, get your free personal offer.

Prinz.tax Steuerberatung GmbH is a member of the German Chamber of Tax Advisors (Steuerberaterkammer) and has specialised in providing personalised tax advisory services for expats in Germany.