Number format: this calculator uses German notation throughout — a comma is the decimal separator and a dot groups thousands. “1.234,56” means one thousand two hundred thirty-four euros and fifty-six cents. The figures come from German tax law, so they are shown the way German authorities write them.
Progression clause (Progressionsvorbehalt)
Wage replacement benefits are themselves tax free, but they raise the rate applied to the rest of your income.
In plain language
Some benefits — unemployment benefit, short-time working allowance, Elterngeld — are themselves free of tax. But they raise the rate at which the rest of your income is taxed. That is why an additional payment is so often due even though the benefit was “tax free”: the benefit is not taxed, your ordinary income simply becomes dearer.
In detail
§ 32b EStG provides that certain wage replacement benefits are added to taxable income for the purpose of determining the tax rate. The scale under § 32a EStG is applied to that increased income, and the resulting average rate is then applied to the actual (lower) taxable income. Anyone receiving more than 410 € of such benefits in a year is required to file a tax return under § 46 (2) no. 1 EStG.
Worked example
30.000 € of taxable income plus 6.000 € of unemployment benefit: without the benefit, 4.217,00 € of income tax would be due. With it, the scale is applied to 36.000 €; the resulting average rate of 16,59 % is then applied to the 30.000 € — giving 4.975,00 €. The unemployment benefit itself stays untaxed, yet costs 758,00 € of tax through the higher rate.
In brief
The benefits are added to taxable income only to find the rate; that rate is then applied to the actual income.
Legal basis: § 32b (1) and (2) EStG · as at 2026