Netto income, or “Nettoeinkommen” in German, refers to the amount of money an individual takes home after all taxes and social security contributions have been deducted from their gross salary. Literally translated, “Netto” means “net” in English.
What is “Netto income”?
In Germany, Netto income is the actual earnings that an employee receives after the deduction of taxes and social security contributions from their gross income (Bruttoeinkommen). This is the money that is available for personal use and savings. The Netto income is typically around 65% of the Brutto incomeBrutto income, literally translated as "gross income" in English, refers to the total earnings of an individual or business before... More, but this can vary based on individual circumstances such as tax class, health insurance, and other factors[2].
More information about “Netto income”
The calculation of Netto income in Germany considers various taxes and social contributions, including income tax, solidarity surcharge, and contributions to pension, unemployment, health, and care insurance. The exact amount of Netto income can be determined using online salary calculators, which take into account the specific details of an individual’s employment situation[1][3][4][7][10].
Related to “Netto income”
Here are some additional terms that are related to Netto income:
- Brutto incomeBrutto income, literally translated as "gross income" in English, refers to the total earnings of an individual or business before... More: The gross salary before any deductions are made[3].
- Solidarity Surcharge (SolidaritätszuschlagThe Solidaritätszuschlag, or "solidarity surcharge" in English, is a tax levied in Germany on top of the income and corporate... More): An additional tax levied to finance the costs of German reunification, which is calculated as a percentage of the income tax[9].
- Social Insurance Contributions: Payments made towards pension, unemployment, health, and care insurance, which are typically shared between the employer and employee[10].
Understanding Netto income is crucial for budgeting and financial planning, especially for those new to the German tax system.