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.
Via employerWho: YouAs soon as issued
2
Check your tax class instead of 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 the same either way and settles at filing. Changing class is a short form.
OnlineWho: You
3
Read the shift premiums on your payslip
Supplements for night, Sunday and public holiday work are exempt from income tax within limits set by law, calculated as percentages of a capped basic hourly rate. Social contributions still apply within a separate limit. On a rotating rota this materially changes what your gross-to-net looks like against an office job at the same headline salary.
Via employerWho: Employer
4
Verify the church tax line
Declaring a recognised religion at registration triggers Kirchensteuer at 9% of your income tax in Saxony. Check 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
5
File the relocation-year return even if you are not required to
Removal costs, flat-viewing trips, double rent during the transition, German lessons, work equipment and the commuting allowance are all deductible. Most newcomers assume filing is optional therefore unnecessary, and leave a substantial refund behind. You have up to four years to go back.
OnlineWho: YouBy 31 July of the following year for mandatory filers
6
Declare foreign income and foreign accounts
German residents are taxed on worldwide income subject to treaty relief, and Germany participates in automatic exchange of financial account information. Handle this in year one rather than answering questions about it in year three.
OnlineWho: You

Documents you’ll need

Steuer-ID
Lohnsteuerbescheinigung — the annual employer certificate
Payslips showing shift, night and holiday premiums
Receipts for relocation costs, work equipment and training
Records of foreign income and foreign accounts

Things most newcomers don’t know

Night, Sunday and holiday premiums are tax-free within statutory limits, which reshapes a shift salary.

Section 3b of the Einkommensteuergesetz exempts supplements for night work, Sunday work and public holidays from income tax up to defined percentages of a capped basic hourly rate. For anyone on a continuous rota at one of the fabs, a meaningful slice of gross pay arrives untaxed, and an office job at the same headline gross nets less. It also means comparing two offers on the headline figure alone gives you the wrong answer.

Source: §3b EStG

Saxony charges 9% church tax, and the election happened at your registration appointment.

Kirchensteuer here is 9% of your income tax liability — the standard rate, against 8% in Bavaria and Baden-Württemberg. It is deducted automatically from payroll with no separate notification, so most newcomers never link the payslip line to the five-minute conversation at the Bürgerbüro. Leaving the church requires a formal appointment and a fee and takes effect only from the following month.

Source: Sächsisches Staatsministerium der Finanzen

The relocation year is the return most worth filing and the one most often skipped.

Removal costs, trips to view flats, double rent during the transition and a flat-rate allowance for incidentals are deductible, and so are German lessons, work equipment and the commuting allowance. New arrivals assume that because filing is optional it is unnecessary, and leave a four-figure refund with the Finanzamt. Voluntary returns can be filed up to four years back, so a skipped first year is recoverable.

Source: Bundesministerium der Finanzen

Compare a German offer on net, not gross — and remember eastern salaries start lower.

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. Eastern German pay for equivalent work still trails western pay, which the much lower rent here offsets — but only if you do the arithmetic on net income against actual housing costs rather than on the headline number.

Source: Deutsche Rentenversicherung

Common mistakes to avoid

Comparing a shift job against an office job on gross pay without accounting for tax-free night and Sunday premiums.
Declaring church membership at registration without realising Saxony charges 9% of your income tax.
Skipping the relocation-year return and leaving a likely refund unclaimed.
Reading your Steuerklasse as a tax rate rather than a withholding setting.
Forgetting that as a German tax resident your worldwide income and foreign accounts are in scope.

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