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German Trade Tax Calculator 2026

Work out your Gewerbesteuer in one step: allowance, base amount, your municipality's multiplier — and the income tax credit that often reduces the real burden to nothing.

100% freeNo data storedSec. 11 GewStG · Sec. 35 EStG

Important: your municipality sets the multiplier

German trade tax is a municipal tax. The base rate (3.5%) and the allowance (€24,500) are set federally, but every municipality decides its own multiplier by by-law, and it can change at the turn of the year. The city multipliers stored here reflect the most recently published figures. This calculation is a non-binding estimate and does not replace tax advice.

Profit & legal form

€

€24,500 allowance · credit under sec. 35 EStG

Municipality & multiplier

%

National average for towns above 20,000 inhabitants: 438%

Additions & reductions

€
€

Optional. Enter the already determined addition or reduction amount here — not the raw expenses. Financing components carry a €200,000 allowance, so many small businesses can simply leave 0 here.

Your trade tax

€7,770

per year · Multiplier 400 %

Tax base amount

€1,942.50

Nominal rate

9.71 %

Effective rate

0.00 %

Effective burden after the credit

At your multiplier the credit under sec. 35 EStG covers the whole trade tax — no additional burden remains.

Prepayment per quarter€1,942.50

The municipality collects prepayments on 15 February, 15 May, 15 August and 15 November (sec. 19 GewStG).

Trade tax at different multipliers

The bars show the same taxable base at different multipliers. Your own value is highlighted.

The calculation step by step

Profit from the business
€80,000
+ Additions (sec. 8 GewStG)
€0
− Reductions (sec. 9 GewStG)
€0
= Trade incomerounded down to full €100
€80,000
− Allowance
€24,500
= Taxable base
€55,500
× base rate 3.5% = tax base amount
€1,942.50
× multiplier = trade tax
€7,770.00

Credit under sec. 35 EStG

Sole traders and partners in a partnership may deduct four times the tax base amount from their income tax. Up to a multiplier of 400% this credit offsets the trade tax in full.

4 × tax base amount
€7,770.00
Trade tax actually paid
€7,770.00
Maximum relief (income tax)
€22,464.00
Creditable
€7,770.00

The credit is capped at the trade tax actually paid. Your multiplier is at most 400%, so the trade tax is fully offset.

What to know about German trade tax

  • The €24,500 allowance is only available to natural persons and partnerships. A GmbH or UG pays trade tax from the first euro of trade income — but no income tax falls due on its profit.
  • Since 2008 trade tax is no longer a deductible business expense (sec. 4 para. 5b EStG). It therefore reduces neither the trade income nor the taxable profit.
  • Freelancers, farmers and foresters and purely asset-managing activities are not subject to trade tax. What matters is the nature of the activity, not the commercial register entry.
  • This calculation assumes for simplicity that your business income is your only income and equals your taxable income. It is a non-binding orientation and does not replace tax advice.

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Guide: understanding German trade tax

Multiplier, allowance, credit and legal form — clearly explained

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Frequently Asked Questions

In four steps. First, the profit from the business is increased by additions under sec. 8 GewStG and reduced by reductions under sec. 9 GewStG — the result is the trade income. Second, it is rounded down to full 100 euros and natural persons and partnerships deduct the allowance of 24,500 euros. Third, the remaining base is multiplied by the base rate of 3.5 per cent, giving the tax base amount. Fourth, the municipality multiplies that amount by its multiplier. With 60,000 euros of trade income and a multiplier of 400 per cent that is (60,000 − 24,500) × 3.5% × 4.0 = 4,970 euros.

As a sole trader or partnership you only pay from a trade income above 24,500 euros. Below that the allowance applies, capped at the trade income itself — so it never creates a loss carry-forward. At 24,600 euros of trade income the base is 100 euros, the base amount 3.50 euros and the trade tax at a 400 per cent multiplier 14 euros. Corporations such as a GmbH or UG have no allowance and pay from the first euro of trade income.

The multiplier is the percentage by which the municipality multiplies the tax base amount. Every municipality sets it by by-law; the statutory minimum is 200 per cent (sec. 16 para. 4 GewStG) and there is no upper limit. In large German cities rates are typically between 410 and 540 per cent, and the average for municipalities above 20,000 inhabitants was most recently 438 per cent. Because municipalities can change their multiplier at the turn of the year, check the current figure with your municipality before relying on it.

Sole traders and partners may deduct four times the trade tax base amount from their income tax. Three caps apply simultaneously and the lowest wins: four times the base amount, the trade tax actually paid, and the maximum relief amount, i.e. the income tax attributable to the business income. Up to a multiplier of 400 per cent the trade tax equals exactly four times the base amount — the burden is then arithmetically neutral, provided your income tax is high enough.

Because the credit is firmly capped at four times the base amount while the trade tax keeps rising with the multiplier. At 400 per cent the two match exactly. At 500 per cent you pay five times the base amount but only four times is credited — one fifth remains as a real additional burden. With a base amount of 1,500 euros that is 1,500 euros of trade tax that is no longer offset. This excess is exactly what the calculator shows as your effective burden.

No. Trade tax only covers a standing commercial business. Freelance activities under sec. 18 EStG — doctors, lawyers, architects, tax advisers, journalists or teaching activities — are outside its scope, as are agriculture, forestry and purely asset-managing activities. Take care when freelance and commercial activities are mixed: in a partnership even a small commercial activity can taint all income as commercial. Have this checked professionally if in doubt.

They turn the taxable profit into the trade income, because trade tax is meant to capture the yield of the business regardless of how it is financed. Under sec. 8 no. 1 GewStG one quarter of the sum of certain financing components is added back — interest in full, 20 per cent of rents for movable and 50 per cent of rents for immovable assets, and 25 per cent of licence fees. That sum is exempt up to 200,000 euros. Reductions include 1.2 per cent of the assessed value of business real estate (sec. 9 no. 1 GewStG).

The calculator reproduces the statutory route exactly: rounding down to full 100 euros, the 24,500 euro allowance for natural persons and partnerships only, the 3.5 per cent base rate and multiplication by the municipal multiplier. For the credit under sec. 35 EStG it makes one simplification: it assumes your business income is your only income and that the profit equals your taxable income. If you have other income, special expenses or loss carry-forwards, the maximum relief amount shifts. The result is a non-binding estimate and does not replace tax advice.