Before you start

Steuer-ID, issued automatically after Anmeldung
Understanding of your tax class
Records of foreign income and foreign accounts
An ELSTER account, if filing yourself

Step-by-step

1
Give your employer your Steuer-ID as soon as it arrives
Until they have it, payroll applies the least favourable tax class and a large amount comes off your pay. It is recoverable but the cash-flow effect in your first months is real.
Via employerWho: YouAs soon as issued
2
Understand your tax class
Steuerklasse determines monthly withholding: class 1 for single people, 3/5 or 4/4 combinations for married couples. A married couple where one earns considerably more can reduce monthly withholding by choosing 3/5, though the annual liability is settled at filing either way. Changing class is a simple form.
OnlineWho: You
3
Check your church tax position
If you declared membership of a recognised church at Anmeldung, church tax is deducted automatically at 8% of your income tax in Bavaria. If you are not a practising member, formally leaving the church is possible but requires an appointment and a fee — and it takes effect from the following month rather than retrospectively.
In personWho: You
4
Consider filing a return even if not required
Many employees are not obliged to file, but a return frequently produces a refund — commuting costs, work equipment, relocation expenses, professional training and double-household costs are all deductible. Relocation year returns are particularly likely to refund.
OnlineWho: YouBy 31 July following the tax year
5
Report foreign accounts and income
German tax residents are taxed on worldwide income, subject to treaty relief. Foreign accounts and income must be declared. Germany participates in automatic information exchange, so undeclared foreign accounts are visible.
OnlineWho: You
6
Get help for the first year
A Lohnsteuerhilfeverein — an employee tax assistance association — handles salaried returns for a modest income-based fee and is used routinely by Germans. For anything involving foreign income or self-employment you need a Steuerberater.
In personWho: You

Documents you’ll need

Steuer-ID
Lohnsteuerbescheinigung — the annual employer certificate
Records of deductible expenses, including the move itself
Foreign income and account records
Certificate of tax residence from your home country, for treaty claims

Things most newcomers don’t know

Church tax is 8% in Bavaria and 9% in most of Germany — and you opt in at Anmeldung.

The declaration of religious affiliation made during a five-minute registration appointment triggers automatic deduction of church tax at 8% of your income tax liability in Bavaria. Most newcomers do not realise the question has financial consequences. Leaving the church afterwards is possible but requires a formal appointment, a fee, and takes effect only from the following month.

Source: Bayerisches Landesamt für Steuern

Relocation costs are deductible, and the moving-year return often refunds well.

Costs of a work-related move — transport, travel to view flats, double rent during the transition, even a flat-rate allowance for incidentals — are deductible against German income tax. New arrivals frequently do not file in their first year, assuming it is not required, and leave a substantial refund unclaimed.

Source: Bundesministerium der Finanzen

A Lohnsteuerhilfeverein is the cheap way to file, and Germans use it routinely.

Employee tax assistance associations prepare salaried returns for an annual membership fee scaled to income, far below a Steuerberater's rate. They cannot handle self-employment or business income, but for a salaried newcomer with relocation expenses they are the obvious route.

Source: Bundesverband Lohnsteuerhilfevereine

Social security is deducted on top and it is substantial.

Pension, health, unemployment and long-term care insurance contributions come off gross pay in addition to income tax, split with the employer. A German gross salary therefore converts to net considerably less favourably than in low-social-charge countries. Compare offers on net, not gross.

Source: Deutsche Rentenversicherung

Common mistakes to avoid

Declaring church membership at Anmeldung without realising it triggers 8% church tax.
Not filing a return in the relocation year and forfeiting a likely refund.
Comparing a German gross salary against a foreign one without accounting for social contributions.
Delaying giving your employer the Steuer-ID and losing cash flow to emergency withholding.
Assuming a married couple's 3/5 tax class choice changes the annual liability — it changes monthly cash flow only.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.