Before you start

Steuer-ID, issued automatically after your Anmeldung
An understanding of which tax class applies to you
Records of foreign income, foreign accounts, relocation costs and commuting distance
An ELSTER account, if filing yourself

Step-by-step

1
Hand payroll your Steuer-ID as soon as it arrives
Until the employer has it, wage tax is withheld under the least favourable class and a large amount comes off your pay. It is reconciled later, but the cash-flow effect during a move is real. Chase the number rather than waiting for it.
Via employerWho: YouAs soon as issued
2
Check your tax class rather than accepting the default
Class 1 for single people, class 2 for single parents, and married couples choose between 4/4, 3/5 and the Faktorverfahren. A couple with unequal incomes improves monthly cash flow with 3/5, but the annual liability is identical either way. Changing class is a short form.
OnlineWho: You
3
Verify the church tax line on your first payslip
Declaring a recognised religion at registration triggers Kirchensteuer at 8% of your income tax in Bavaria. Read the payslip rather than assuming. Leaving the church is a formal registry act with a fee, effective from the following month only.
In personWho: You
4
Claim the commuting allowance across the metropolitan region
The Entfernungspauschale is claimed per kilometre of one-way distance for every working day. In a region where people live in Fürth and work in Erlangen, or live in Nuremberg and work at Herzogenaurach, it accumulates into one of the larger deductions an ordinary employee has.
OnlineWho: You
5
File the relocation-year return even if you are not obliged to
Removal costs, flat-viewing trips, double rent during the transition, German lessons and work equipment are all deductible on top of the commuting allowance. Most newcomers never file that year, assuming it is only for the self-employed, and leave a substantial refund behind.
OnlineWho: YouBy 31 July of the following year for mandatory filers
6
Check the property transfer tax before you dismiss buying
Grunderwerbsteuer is set by each state and Bavaria has kept the lowest rate in the country at 3.5%, against 5% to 6.5% almost everywhere else. On a Nuremberg purchase price that is a difference of thousands of euros in acquisition costs, and it changes the buy-versus-rent arithmetic more than people expect.
OnlineWho: You

Documents you’ll need

Steuer-ID
Lohnsteuerbescheinigung — the annual employer certificate
A record of commuting days and one-way distance
Receipts for relocation costs, work equipment and training
Records of foreign income and foreign accounts

Things most newcomers don’t know

Bavaria still charges 3.5% property transfer tax, the lowest rate in Germany.

Grunderwerbsteuer is set by each state and most have raised it to between 5% and 6.5%; Bavaria has held at 3.5%. Combined with purchase prices well below Munich's, that makes buying in Nuremberg meaningfully cheaper to enter than in almost any comparable German city. Acquisition costs are the part of a German purchase that surprises foreigners — notary, land registry, transfer tax and any agent fee — and this is the biggest single line of them.

Source: Bayerisches Landesamt für Steuern

Church tax here is 8%, and only Baden-Württemberg matches it.

Everywhere else in Germany the rate is 9% of your income tax liability. The election is made on your registration form and produces an automatic payroll deduction with no separate notification, so most newcomers never connect the payslip line to the appointment. Leaving the church later costs a registry fee and takes effect only from the following month, so an answer regretted in November still costs the full year.

Source: Bayerisches Landesamt für Steuern

The commuting allowance is worth a great deal in a three-city region.

Nuremberg, Fürth and Erlangen run together into one labour market, with Herzogenaurach and Zirndorf attached, so a very large share of people commute across municipal boundaries every day. The Entfernungspauschale is claimed per kilometre of one-way distance for each working day, and over a year it is frequently the single largest deduction on an ordinary employee's return. Keep a record of your working days.

Source: Bundesministerium der Finanzen

Compare a German offer on net, not gross, and compare Nuremberg to Munich on both.

Pension, health, unemployment and long-term care contributions come off in addition to income tax, split with the employer, so a German gross converts to net far less favourably than in the UK or the Gulf. Against Munich specifically, a Nuremberg offer is usually lower in gross and considerably better once rent is subtracted from net — which is the whole argument for the city and one worth doing on a spreadsheet rather than on instinct.

Source: Deutsche Rentenversicherung

Common mistakes to avoid

Declaring church membership at registration without realising it costs 8% of your income tax every year.
Skipping the commuting allowance in a region built around cross-city commutes.
Not filing the relocation-year return and leaving a likely refund unclaimed.
Budgeting a property purchase without the acquisition costs, even though Bavaria's transfer tax is the country's lowest.
Comparing a Nuremberg offer against a Munich one on gross salary rather than on net income after rent.

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