Student Taxes in Germany: Allowance, Refund and Tax Class

Most international students in Germany pay no income tax at all, and a good number are owed money they never claim. The threshold moved on 1 January 2026: the Grundfreibetrag under section 32a of the Income Tax Act is now EUR 12,348 a year, up from the figure most guides still quote. Everything you earn below that is untaxed, which a part-time contract or a minijob will not exceed unless you spend the whole summer working full-time.

The allowance is bigger than the headline number

Every worker in Germany gets the same tax-free allowance, and being a student changes nothing about it. But the EUR 12,348 is only the first layer. Two more sit on top of it automatically, with no receipts and no claim form:

• The Arbeitnehmer-Pauschbetrag of EUR 1,230 under section 9a, a flat deduction for work-related expenses that applies whether or not you had any.
• The Sonderausgaben-Pauschbetrag of EUR 36 under section 10c, granted unless you prove more.

Stack them and the practical floor is EUR 13,614 of gross annual earnings before a single euro of income tax is due, before you claim anything real. That is why a capped minijob can be treated as clean money: at the 2026 limit of EUR 603 a month it produces EUR 7,236 across the year, barely half the threshold. The number is annual, not monthly, so a heavy earning month does not by itself create a tax bill.

Tax and social insurance are different bills

Students conflate these constantly. Income tax is what the allowance protects you from. Pension, health and other social contributions are a separate deduction, and they can apply in a year when you owe no tax at all.

In a minijob, the split is stark. Your employer pays a flat 2 percent Pauschsteuer that settles the tax side entirely, so no wage tax comes off your payslip. What does come off is 3.6 percent for pension insurance, unless you apply for exemption. Zero tax, some social insurance: exactly the pattern people find confusing.

A Werkstudent contract works on the same logic from the other direction. Section 6 of SGB V exempts people employed while enrolled as regular students at a university from compulsory health insurance as employees, which is the whole point of the status and a real financial advantage over an ordinary part-time job. Pension contributions still apply. The health element interacts with your compulsory student cover, explained in how student health insurance is set up in Germany.

You are almost certainly in class 1

There is no student tax class. Unmarried students with no children fall into tax class 1 like everyone else in that position, and it determines how much your employer withholds each month. If a payslip surprises you, the class is the first thing to check, and the usual cause is a second job, which lands in class 6 and is withheld far more aggressively.

When you do owe something

Cross the allowance and tax applies only to the amount above it, at progressive rates. The first bracket runs from EUR 12,349 to EUR 17,799 and starts at 14 percent, the second from EUR 17,800 to EUR 69,878, and the 42 percent rate does not begin until EUR 69,879. A student does not meet those numbers. Part-time work during term rarely gets there, and even a well-paid Werkstudent contract in engineering or IT usually stops short.

Before you plan a big earning summer, check how many days a year your visa lets you work. The day limit almost always bites long before the tax does.

Getting withheld tax back

Here is the mechanism nobody explains, and it is the reason refunds exist. Your employer does not know what you will earn over the year, so payroll annualises whatever you earned this month and withholds as if every month looked the same.

Work through it. You take a full-time job over the semester break at EUR 15 an hour, 40 hours a week, for two months. Each of those months grosses about EUR 2,600. Payroll treats that as a EUR 31,200 a year salary, which is comfortably into the second bracket, so it withholds wage tax accordingly. Then you go back to lectures and earn nothing for the rest of the year. Your actual annual income is EUR 5,200, well under EUR 13,614, so the correct tax for the year is zero and every euro withheld is yours to reclaim.

That is not a loophole or a special student claim. It is the system working as designed: monthly withholding is a guess, and the annual return is the correction. If you hold a minijob alongside a regular part-time role, the assessment looks at your total annual income rather than at each job separately, so keep both sets of payslips.

The filing master's students skip and should not

This one is worth more than the refund, and almost every international student misses it.

Section 9 of the Income Tax Act treats the cost of a first qualification as a personal expense: deductible only as Sonderausgaben and capped at EUR 6,000 a year, which is close to useless because Sonderausgaben cannot create a loss. But once you have completed an initial qualification, defined as an organised course of at least 12 months full-time with a final examination, everything after it counts as Werbungskosten: real income-related expenses, uncapped.

Your bachelor's is that first qualification. Your German master's is the second one. So semester contributions, a laptop bought for your studies, specialist books, German courses, travel to campus and the flight to Germany can be claimed in full as work-related expenses against future income.

In a year with little or no income those expenses exceed your earnings, and the difference becomes a Verlustvortrag, a loss carried forward under section 10d. It has no expiry date. When you finish and start your first job on a real salary, that accumulated loss is deducted from your taxable income and the refund arrives in the year you can least afford to wait for it. File a return for every year of your master's, including the ones where you earned nothing at all, because those are the years that build the biggest carry-forward.

When filing is not optional

Most students file voluntarily to get money back. Some are obliged to file whether they want to or not. Section 46 of the Income Tax Act lists the triggers, and two of them catch students regularly: income not subject to wage tax withholding above EUR 410 in the year, and drawing wages from more than one employer at the same time, which is common the moment you add a second campus job. If either applies, filing is a duty and the deadline is real.

Filing it

Returns go through ELSTER, the official online portal, or through commercial software that talks to it. You need your payslips, your Steuer-Identifikationsnummer, and your bank details.

1. Register for an ELSTER account. Activation arrives by post, so allow a couple of weeks before any deadline.
2. Enter your wages from the Lohnsteuerbescheinigung your employer issues after year end.
3. List your study costs under Werbungskosten if this is your second degree, with receipts kept but not submitted.
4. If the result is a loss, tick the box for a Verlustfeststellung so the carry-forward is formally assessed rather than merely calculated.

The deadline if you are obliged to file is seven months after the end of the tax year, so 31 July. Hand it to a tax adviser or a Lohnsteuerhilfeverein and it stretches to the end of February of the second following year. If you are filing voluntarily, the assessment period under section 169 of the Fiscal Code is four years, which means in 2026 you can still file for 2022. Students who arrived three years ago and never filed should start with the oldest year before it expires.

After you graduate

The allowance and the tax class carry over into full-time work, but your salary now sits above the threshold, so the withholding on your payslip becomes real rather than refundable. That is exactly when the Verlustvortrag you built during your master's pays out. Worth building into your salary expectations when you plan the post-study job-seeker route, alongside what Werkstudent roles pay while you are still studying.

Sources

• Section 32a EStG, Grundfreibetrag and tax brackets
• Section 9a EStG, employee lump sum
• Section 9 EStG, education costs as Werbungskosten
• Section 149 AO, filing deadlines
• Minijob-Zentrale, earnings limit and levies
• ELSTER

Not sure whether you owe anything? Get post-arrival support and have your payslips looked at.