US Citizens Working in Germany
See what you actually take home after US and Germany taxes — whether you're already working abroad or planning a move.
Here's what matters most for US citizens working in Germany:
- •Germany has high income tax rates (up to 45%) plus solidarity surcharge
- •FEIE can exclude up to ~$126,500 from US taxation if you meet the physical presence test
- •Social security contributions (healthcare, pension, unemployment) add significant costs
- •US-Germany tax treaty helps prevent double taxation
Who taxes you?
As a US citizen working in Germany, you're subject to taxation by both countries. The US taxes citizens on worldwide income, but the Foreign Earned Income Exclusion (FEIE) can exclude up to approximately $126,500 of foreign earned income if you meet the 330-day physical presence test. Germany taxes residents on German-sourced income with progressive rates up to 45%, plus a solidarity surcharge. Social security contributions for healthcare, pension, and unemployment add significant additional costs. The US-Germany tax treaty provides foreign tax credits to prevent double taxation.
Common pitfalls
- German tax rates are among the highest in Europe (up to 45% plus surcharges)
- Social security contributions can add 15-20% on top of income taxes
- Not meeting the 330-day physical presence test disqualifies you from FEIE
- State tax obligations may persist if you maintain US state residency
- Currency fluctuations between USD and EUR can impact your effective income
Frequently asked questions
Yes. US citizens must file US tax returns regardless of where they live. However, you may not owe US taxes if your income is below the FEIE threshold and you meet the physical presence test.
Germany has a progressive income tax system with rates from 0% to 45%, plus a solidarity surcharge of 5.5% of the tax amount. Social security contributions for healthcare, pension, and unemployment add significant additional costs, typically 15-20% of gross income.
Generally no. The US-Germany tax treaty and foreign tax credits help prevent double taxation. You'll typically pay the higher of the two tax rates, not both.
German social security includes health insurance, pension contributions, unemployment insurance, and long-term care insurance. These are typically split between employer and employee, but can add 15-20% to your total tax burden.
Official resources
Primary sources:
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