For most married couples and registered partners, Germany’s tax system is designed in a way that makes filing together financially advantageous, particularly when incomes differ.
But there are still certain circumstances when filing separately can result in a lower overall tax bill.
Understanding how these rules work, and when they apply, can help you make a more informed decision and potentially save money.
Why joint filing is usually better
The German system is designed to favour couples who file together, via a mechanism known as “spousal income splitting”.
In essence, your combined income is added together, divided in half, taxed at that lower level, and then doubled again. Because income tax in Germany is progressive, this typically reduces the overall tax burden, particularly when one partner earns significantly more than the other.
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The tax system allows income splitting for married couples and registered civil partnerships, which are treated equally under German law.
When separate tax returns can make sense
Despite the general rule, requesting separate assessments can occasionally be worthwhile, generally when Germany’s tax rules affect each partner in very different ways.
One of the most common examples is where one partner receives wage replacement benefits such as parental allowance, unemployment benefits or short-time work payments.
Although these benefits are tax-free, they increase the tax rate on your remaining income. When incomes are combined in a joint return, this can in turn push up the overall tax rate applied to your combined income.
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Another situation where separate filing may be worth considering is when both partners are high earners. Joint filing tends to bring the greatest benefit when incomes are uneven. Where both incomes are already within the top tax bracket, the advantage of splitting is significantly reduced or non-existent.
Differences in expenses can also play a role. Germany allows certain extraordinary costs, such as high medical expenses, to be deducted once they exceed a set threshold.
If only one partner incurs these costs, filing separately may allow that individual to exceed the threshold and claim relief. In a joint return, the combined income increases the threshold, which can eliminate the tax benefit altogether.
Severance payments are another example. Where one partner receives a large one-off payment but has otherwise low income, separate filing can sometimes result in a lower overall tax burden, depending on how the income is taxed.
Other examples include cases where one partner has declared losses, earns income abroad, or where only one partner pays church tax (Kirchensteuer). In the latter case, joint filing can trigger a special church tax (Besonderes Kirchgeld) on your combined income, which filing separately can avoid.
While none of these situations automatically make separate filing the better option, they are all strong indicators that it may be worth running the numbers.
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How to work out what’s best for you
Unfortunately, there is no simple rule for identifying when filing separately might make good financial sense.
The good news is that you don’t need to work it out manually. A number of tools available in Germany will calculate your tax liability under both options, compare the results and indicate which approach is more favourable before you submit your return.
Popular options include Wiso Steuer, Taxfix, SteuerGo, Wundertax, Smartsteuer and Lohnsteuer kompakt, among others.
If you prefer more personalised advice, you can also turn to a Lohnsteuerhilfeverein – a membership-based income tax assistance association that provides support at relatively low cost, particularly for employees.
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Alternatively, a certified tax adviser (Steuerberater) can analyse your situation in detail and help you optimise your filing choice, which can be especially useful if you have more complex finances, such as foreign income or business activity.
In more specialised cases, involving legal questions rather than purely tax calculations, consulting a lawyer with expertise in tax law may also be advisable.
How to file separately in Germany
One important point to bear in mind is that the system in Germany is set up to assume that couples will file jointly.
This means that if you want to file separately, you must actively opt out by selecting “individual assessment” on your tax return, whether you're filing via Elster, on paper or using tax software.
This choice applies to each tax year individually, so it can be reviewed and adjusted annually depending on your circumstances.
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This is a general guide, not legal or tax advice. Tax rules are complex and individual circumstances vary, so it’s always worth consulting a qualified tax adviser or lawyer.
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