Your wages are always taxable if you are in employment in Germany. The amount of wage tax that you must pay is calculated on the basis of your gross wage. Legislation provides that the responsibility to calculate the amount of wage tax that is payable, to retain it, and to turn it over to the tax office, lies with your employer.

While the wage tax is not a specific category of tax, it is a particular way in which income tax is levied. Generally, all components of wages are subject to wage tax, irrespective of how you receive them (as remuneration in cash, remuneration in kind, benefits or perquisites).

If you are in low-paid or temporary employment (a “minijob”) in Germany, the employer may apply a special system relating to the taxation of your wages. Under certain conditions you may then be taxed by your employer at a flat rate.