Do I save tax overall with the right tax class?

No. Choosing a tax class does not change your annual tax. For married couples it is finalised through income splitting in the tax return, regardless of whether you had IV/IV or III/V during the year. The class choice only determines how much wage tax is withheld each month — your liquidity. Overpaid tax is refunded, underpaid tax must be paid back.

What is the difference between III/V and IV/IV?

With IV/IV both partners are taxed like single people — each keeps their full basic allowance. With III/V the higher earner in class III gets the doubled basic allowance and therefore pays much less wage tax monthly; the lower earner in class V pays disproportionately more. On balance III/V often leaves the couple with more monthly net, but a back payment looms. IV/IV is more even and produces fewer surprises.

Who benefits from the III/V combination?

III/V mainly brings more monthly liquidity when the partners' incomes differ significantly — a rule of thumb is roughly 60:40 or more. The higher earner takes class III, the lower earner class V. With almost equal incomes III/V brings hardly any liquidity advantage and only creates unnecessary back-payment risk. Our calculator shows for your actual figures which combination yields the highest combined net.

What is the factor method (IV/IV with factor)?

With the factor method both partners stay in class IV, but the tax office additionally enters a factor below 1. This factor ensures the monthly withheld wage tax already roughly matches the expected joint annual tax. The tax burden is thus distributed fairly according to income, there is more monthly net than with plain IV/IV and usually no nasty surprise at year-end. The factor is calculated from your annual gross wages and is valid for two years.

Do I have to file a tax return with III/V?

Yes. The III/V combination (and likewise the factor method) triggers an obligation to file an income tax return. The reason: because monthly wage tax in this combination can be systematically too low, the tax office wants to check the actual tax at year-end. Expect that a back payment may be due and set money aside for it. With IV/IV without a factor this filing obligation usually does not apply.

How often and by when can I change my tax class?

Married couples can change their tax class several times a year. The application is filed with the tax office (form for changing the tax class of spouses/civil partners), nowadays usually electronically. A change generally takes effect from the month after the application. Timing matters before wage replacement benefits: for the highest possible parental allowance the switch should be made well before the start of the maternity protection period. Allow several months' lead time here.

How does the tax class affect parental allowance?

Parental allowance is based on the average net pay of the twelve months before the birth (or before maternity protection). Whoever is in a more favourable tax class during that period and therefore has a higher net also receives more parental allowance. For the parent who will draw the parental allowance, switching to a lower tax class (e.g. III) in good time can pay off. The change must, however, be made early enough to take effect within the assessment period.

How accurate is this tax class calculator?

The calculator uses the 2026 income tax tariff (§ 32a EStG) and current social insurance rates and computes each combination separately for both partners. It makes flat assumptions: statutory health and pension insurance, a 2.9 percent additional contribution and no individual allowances. For comparing the combinations and the monthly liquidity this is very meaningful. The final annual tax, however, depends on your individual assessment — this calculation is non-binding and does not replace tax advice.

Tax Class III/V or IV/IV — Which Is Better? | Tax Class Calculator

Tax Class III/V or IV/IV — Which Is Better?

Almost every married couple asks this question at some point. The short answer is: it depends — above all on the ratio between the two incomes and on whether you prefer more money each month or want to avoid a back payment. The long answer is provided by this article.

So you are not fishing in the dark, it is worth looking at the concrete figures first: the <a href="/steuerklassen-rechner">tax class calculator</a> shows for your salaries which combination yields the highest combined monthly net and how large the difference really is.

How IV/IV works

With the IV/IV combination both partners are treated as if they were single. Each keeps their full basic allowance, each pays wage tax under the regular tariff on their own income. This variant is the default setting after marriage. Its big advantage: it is even and usually does not lead to a back payment, because the withheld wage tax already comes quite close to the later annual tax.

How III/V works

With III/V the balance of power shifts. The partner in class III gets the doubled basic allowance and pays little wage tax each month. The partner in class V has no basic allowance in the payslip and therefore pays disproportionately much. This combination only makes sense if the higher earner takes class III — because then the relief effect is greatest.

The decisive factor: the income ratio

Whether III/V brings more than IV/IV depends almost exclusively on how unequally the incomes are distributed. As a rule of thumb: only from a ratio of about 60:40 in favour of one partner does III/V pay off noticeably. If one partner earns 4,500 euros and the other 1,800 euros, the monthly liquidity advantage is clear. If both earn 3,000 euros each, it is practically absent — here IV/IV is the better choice.

Why the annual tax stays identical

A widespread misconception is that III/V saves tax overall. That is not true. For jointly assessed married couples the tax is calculated via income splitting, and this result is entirely independent of the chosen wage tax class. The class choice only determines the level of the monthly advance payment. At year-end the tax return balances everything out again — either as a refund or as a back payment.

Pros and cons at a glance

In favour of III/V: more net per month when incomes are unequal, which can help with running loans, for example. Against it: obligation to file a return, risk of a back payment and a very low net for the partner in class V. In favour of IV/IV: even distribution, rarely a back payment, no filing obligation just because of the class choice. The only argument against is the slightly lower combined monthly net with unequal incomes.

And the factor method?

Anyone who wants the higher liquidity of III/V but fears the back payment should look at the factor method. It combines the fair distribution of IV/IV with an individually calculated factor, so that the monthly deductions are already close to the annual tax. For many couples this is the best compromise.

Conclusion

There is no blanket "better". IV/IV is even and uncomplicated, III/V brings more monthly liquidity with unequal incomes but back-payment risk. The annual tax stays the same in both cases. Work through your specific case in the <a href="/steuerklassen-rechner">tax class calculator</a> before you decide.

Tax Class III/V or IV/IV — Which Is Better?

Tax Class III/V or IV/IV — Which Is Better?

How IV/IV works

How III/V works

The decisive factor: the income ratio

Why the annual tax stays identical

Pros and cons at a glance

And the factor method?

Conclusion

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