Germany today is practically a socialist state, where entire generations of politicians fought for the rights of workers. In the end, you most likely will not be allowed to die on the street from hunger or from some rare sore, but the workers themselves will have to pay for this. The spending of the social system last year reached a record 965.5 billion euros - on the other hand, social funds have accumulated 90 billion euros of reserves.
Social contributions are made up of four main insurance policies that are paid almost equally by the employer and the employee:
Pension insurance
You are forced to think about your pension from the very beginning and are forcibly put aside money for you in the pension fund. Having paid pension contributions for 5 years, you will be entitled to receive a German pension. People retire in Germany at the age of 67 (the age is the same for men and women, the year of birth is after 1965), there are options for retirement and earlier with the loss of part of the earned pension points.
The golden rule: the earlier you go and the more you earn, the more you will have time to accumulate a pension. Therefore, if you go with the hope and then live in Europe on the money earned in old age, then it is better to do it at a young age. The employer contributes his 9.3% of your gross salary to your retirement account.
If you have worked for less than 5 years and have not yet earned your retirement and suddenly went to work further in the United States, then you can return your pension contributions (but only “your” 9.3% - the employer's share will remain in the pension fund).
But here too there are indulgences, because there is a tax limit, after which the amount is not taxed (Beitragsbemessungsgrenze). For East Germany, this figure for 2018 is 5800 euros per month, for the Western states - 6500 euros per month. That is, you will pay 9.3% of your salary to the pension fund, but no more than 9.3% of 5800/6500.
Health insurance
It is possible to choose between public and private health insurance.
In state insurance, your contribution is 7.3%, the employer will pay the same amount. There is also an additional contribution, depending on the health insurance fund, it will be from 0% to 1.7% (from next year it will also be divided in half, but for now you pay it yourself).
Despite the frequent criticism of the medical system in Germany, this insurance will cover any complex types of operations, treatments or chemotherapy that a person may have (and some kind of chemotherapy or complex treatment can easily cost € 100K +).
Separately, it should be noted that children (regardless of the number) or an unemployed husband / wife will be insured from your contribution free of charge as a family member.
In private insurance there is an opportunity to save a little while you are young and healthy, as well as if you earn good money (from € 59,400 per year). There you will be provided with a greater amount of comfort, extraordinary service and other PR-subtleties. Nevertheless, over the years, contributions will grow, and it is not a fact that you can afford them closer to retirement.
The transition from private to public insurance is difficult - you either have to earn very little and struggle with bureaucracy, or lose your job and slide to social bottom. In general, the state does not really want you to cunningly save on medical payments in your younger years, and closer to retirement you suddenly turn to state insurance.
If you know for sure that you will not stay in Germany for a long time, then you can try to play with the rates of various private medical offices and save several hundred euros a month on this.
If you know for sure that you will earn a lot even at 60, and a conventional glass of champagne in your doctor's office in the city center or communication with the head doctor is very important for you, then you can also try private medical funds. In all other cases, it will be better to opt for public health insurance.
Here, too, there is a tax limit, up to which payments are accrued - for 2018 it is 4425 euros per month. The general formula of your payments will be (7, 3% + 0..1, 7%) of the gross salary, but not more than (7, 3% + 0..1, 7%) from 4425 euros. This restriction was introduced in order not to burden people with large incomes with taxes, because they would then go to private health care funds.
It is often said here that dental treatment in Germany costs a lot of money, and standard insurance does not cover anything. But not everything is so simple - it is medical services that are already included in standard insurance. A complete list of services can be found on the website of their health insurance fund - conditional treatment of inflammation, follow-up visits or wisdom teeth extraction will be free, in other cases, the fund assumes part of the funds. In extreme cases, you can conclude additional insurance for dental treatment - the price of such insurance is somewhere from 20 euros per month. But even standard medical insurance will not give you to die of a toothache or lose all your teeth.
Unemployment insurance
If in the last two years 12 months you have paid this insurance, then you have the right to receive somewhere 60-67% of net earnings. How long payments will be made depends on the duration of the payment of contributions, etc. It is also possible to receive these payments after 6 months. It will not work for a long time to sit on these payments, and the state actively encourages to look for a new job, but this makes it possible not to starve or start living under the bridge immediately after losing a job.
For reference: after ALG I, social benefits of ALG II (aka Hartz IV) begin, but there the rules for receiving payments are stricter and you must have either permanent residence or a German passport. It is better not to slip into "social workers" at all.
Nursing insurance
If you suddenly lose the opportunity to work and you need care, then payments to this insurance will just become on occasion. The tax limit to which payments are accrued for 2018 is 4425 euros per month.
So, we have sorted out social benefits - this is about 21% of the earned. The legal framework and tax rates are often changed by +/- tenths of a percent, but the overall picture is approximately the same. The income thresholds for each type of insurance are reviewed and adjusted every year.
So, if you go to Germany for a short time, then there is an opportunity to get optimal private insurance and get back the paid pension savings (9, 3%).
Payroll tax (Lohnsteuer)
In Germany, you will receive the Steuerklasse tax class. There are only 6 of them:
1st grade: single (+ married, living separately or divorced) and without children 2nd grade: single (+ married, living separately or divorced) with children 3rd grade: married and the partner does not work (or works and has V-th grade) IV-th grade: both partners work V-th grade: married partner with a lower income (see III-th grade) VI-th grade: second job in parallel with the existing first
This tax is automatically deducted from your salary. At the end of the fiscal year, you have the option to get some of this tax back. It takes into account all possible tax benefits, some separate payments from the employer and takes into account outside earnings. You then receive taxable income. The tax deduction that you would have to pay for the year is deducted from it - if you overpaid, then you will be refunded part of this tax. If you were still engaged in your own business or had some other income, you may have to pay extra. Unfortunately, even with not the highest salary, you very quickly find yourself in the cohort of the largest taxpayers (up to 42-45%).
Solidarity tax
A very strange tax, introduced in the early 90s to overcome the crisis in the Middle East and for the harmonious unification of East and West Germany. Now they are actively discussing the complete abolition of this tax, but for some time you will still have to pay it. As of today, the amount of the tax is 5.5%.
Church tax
If, when filling out the documents when registering in Germany, you indicate that you are a parishioner of one of the officially recognized churches that can levy church tax, then you will be forced to pay this tax - this is 8-9%. Catholics (and therefore Greek Catholics), evangelists or Jews should be especially careful when filling out the documents.
Muslims, Buddhists or Orthodox Christians of all patriarchates can safely register their churches with pride, because they do not have the right to levy church tax.
On the one hand, the tax system is very active in taxing high earnings, on the other hand, with higher earnings, you will pay lower percentages of social expenses for a very moderate level of taxation.
One of the most popular topics among Germans is taxes and tax refunds. Already on January 1, you have the opportunity to start refunding taxes for the last year. Your special costs are taken into account - you can travel from afar to work, or you can help your parents in Ukraine. Just in case, it's best to keep bills for all expenses from English courses to buying some kind of software or laptop. If you are a simple Ukrainian programmer who has no other income, then some part of your taxes will almost always be refunded to you. Last year, an average of 935 euros were returned back.
You can do taxes yourself, and for this there are a lot of programs or online offers on the market, but here you need to understand well and spend a little time studying all the nuances. It is very, very desirable to know the language. A tax advisor can make a tax return for you - this option will suit you if you really have some very complex tax models (an employee and your own business, or you also rent something out, trade stocks and get something every six months as an inheritance or as a gift).
conclusions
Taxes in Germany are really high and the system has been trying for years to improve or make it more attractive for employers and firms. On the one hand, this is a factor that scares away a large number of companies and expats from this country, who can formally earn more in other countries.
It is the high social costs that attract a large number of refugees to this country. And it is precisely the redistribution of payments to those who did not pay anything to the system that arouses the sincere indignation of ordinary Germans at the elections. That is why parties are trying to flirt with the voter and correct the current situation.
On the other hand, thanks to your payments in Germany, you find yourself in a strong operating social system, where you are insured against most of the troubles that can happen to a person - from unexpected unemployment to health. Where conditional school and higher education for your children is free. Or if your earned pension does not reach the subsistence level, then the state will pay you to the required level.
