How does the choice of tax class affect my social security contributions?
July 27, 2024 | 40,00 EUR | answered by Friedhelm Peters
Dear tax advisor,
My name is Marcus Kleine and I am currently unsure which tax class is the right one for me. I am married and have two children. So far, my wife and I have both been in tax class IV. However, I have heard that the choice of tax class can also have an impact on my social security contributions.
My wife works part-time and earns less than I do. This has allowed us to benefit from the favorable tax class IV so far. However, I am wondering if it might be more sensible for my wife to switch to tax class V in order to pay less social security contributions. I am concerned that if we choose the wrong tax class, we may end up having to pay too high contributions and our monthly income may significantly decrease.
Could you please explain to me how the choice of tax class affects our social security contributions and whether it would be advisable for my wife to switch to tax class V? Are there any other options to optimize our social security contributions? I look forward to your professional assessment.
Thank you in advance.
Sincerely,
Marcus Kleine
Dear Mr. Kleine,
Thank you for your question regarding the choice of the right tax class and its impact on your social security contributions. It is important to choose the right tax class in order to benefit from tax advantages and at the same time optimize social security contributions.
There are six different tax classes, of which classes IV and V are relevant in your case. In tax class IV, both spouses are taxed together, with the tax burden being evenly distributed according to income. This is beneficial in your case, as your wife earns less than you. In tax class V, on the other hand, the partner with the higher income is taxed more heavily, which can result in overall lower income tax being deducted.
However, it is important to note that the choice of tax class only affects income tax and not social security contributions. Social security contributions are calculated independently of the tax class and are based on your gross income. If your wife switches to tax class V, less income tax may be deducted, but social security contributions remain the same.
To optimize your social security contributions, you could alternatively consider whether it would be more beneficial for your wife to work more hours and earn more. This could also change the choice of tax class and possibly make tax class III interesting for you as the main earner.
It is important to seek individual advice to find the optimal solution for you. I am happy to assist you in my online consultation hours to analyze your specific situation and provide you with further tips.
I hope this answer has been helpful to you. Please do not hesitate to contact me again if you have any further questions.
Best regards,
Friedhelm Peters
