Church Tax on Your Tax Return
How high is your church tax, when is it collected, and how can I deduct it from my tax return? We will fill you in!
In Germany, state-recognized religious congregations are largely financed by church tax (Kirchensteuer). Each state has its own individual laws that determine how the church tax is collected. After the tax is collected by the tax office (Finanzamt), it is passed on to churches for an estimated 3% administrative fee. All residents of Germany who belong to a tax-entitled religious congregation are required to pay church tax.
Church tax, like solidarity surcharge (Solidaritätszuschlag), is a so-called annex or surcharge tax which essentially means that it’s based on the amount of another tax – church tax specifically is calculated based on your wage tax (Lohnsteuer).
Did you know that you can deduct the full amount you’ve paid in church tax on your tax return (Steuererklärung)? You’ll learn everything you need to know in this article.
State-recognized religious communities
In order to be considered a “corporation under public law” and collect tax, religious congregations must respect the Basic Law (Grundgesetz) and be established on a permanent basis. This status is accompanied by other tax benefits, such as exemption from property tax and and the possibility of tax-deductible donations to church congregations.
Tax is collected for the following religious congregations:
- Roman-Catholic church dioceses
- Protestant church (the regional Protestant churches and the Evangelical Lutheran church)
- Catholic dioceses of the Old Catholics in Germany
- Non-denominational congregations
- Unitarian religious congregations Free Protestants
- Jewish religious congregations
These religious congregations collect tax themselves:
- French church of Berlin
- Danish Seamen’s church in Hamburg
- Mennonite congregation in Hamburg-Altona
- Protestant reformed church in Hamburg
By the way, there are several other congregations that are public corporations and could collect tax but choose not to. This includes Orthodox churches (such as Greek Orthodox) and the Union of Free Evangelical Churches in Germany.
How is church tax calculated and how much do I have to pay?
If you look at your monthly pay slip, you will find the item “church tax.” Your employer calculates your church tax based on the amount of your wage tax minus any child allowances (Kinderfreibeträge) and forwards this tax directly to the tax office under the condition that your electronic income tax card shows the corresponding characteristic, for example “ev” for Protestant and “rk” for Roman-Catholic – the two largest state-recognized religious congregations in Germany.
The amount of tax you pay as a church goer primarily depends on your income while the church rate itself depends on where you live: In Bavaria and Baden-Württemberg the rate is 8 percent of your income tax, while in all other states it is 9 percent.
In a few regions, such as the dioceses of Limburg and Speyer in Rhineland-Palatinate and parts of Hesse, churches also collect a so-called church property tax (Kirchengrundsteuer) which is about 10% of the property tax assessment amount of their members’ real estate.
If you are a member of a church with capital income (Kapitaleinkünfte) that exceeds the general savings allowance (Sparer-Pauschbetrag), you also pay church tax on settlement tax (Abgeltungssteuer) at a rate of 8 or 9 percent (depending on where you live). The church tax on capital income cannot be deducted again separately as the settlement is automatically reduced.
By the way: You also have to pay church tax on severance packages (Abfindungen), but you have the option to apply for a partial waiver from your diocese or regional church. Churches often waive half of the church tax on severance packages even though they aren’t obligated to do so. For your informal application, you will need your tax assessment notice (Steuerbescheid) and your pay slip showing the amount of your severance package.
Your local tax office will calculate your taxable income and the income tax due on it when you submit your tax return. The church tax due is then calculated based on your income tax and is offset against your monthly advance payment.
How do I enter church tax on my tax return?
On your tax return, you can declare the full amount of church tax you have paid as well as local/special church tax (more on this below) as special expenses (Sonderausgaben). You can declare prepaid or postpaid church tax. Declaring and deducting these taxes from your income reduces your income tax, and in turn the church tax that is determined from it.
If your church has the option to collect taxes but chooses not to and you still support them voluntarily, you can deduct this just as you would church taxes, i.e. the usual church tax rate of 8 or 9 percent.
If you have voluntarily paid money to churches that has nothing to do with the church tax, you can claim this as a donation on the Special Expenses Form (Anlage Sonderausgaben) of your tax return.
Cap limit for high income
If your income is low and doesn’t exceed the basic tax-free allowance (Grundfreibetrag) of 9,744 euros (2021), you don’t pay any income tax, and therefore no church tax.
If you have a high income that leads to an increased church tax, there is a possibility that you could read a cap limit (except in Bavaria). If your income is above the so-called capping threshold (Kappungsschwelle) which is regulated by regional church tax laws, your church tax will be calculated based on your taxable income instead of your income tax at a rate of 2.75%-4% (depending on federal state).
Typically, the tax office will automatically apply for the method that is most favorable for you after your assessment (Günstigerprüfung), but there are some states where you have to apply for the church tax cap yourself: Berlin, Baden-Württemberg, Hesse, North Rhine-Westphalia, Rhineland-Palatinate, and Saarland.
Local church tax (Allgemeines Kirchgeld)
Some parishes charge a local church tax to adult church members whose income exceeds a specific amount. This tax is based on your income and is collected in some congregations regardless of whether you’ve paid your church tax already. Typical payments are between 0-120 euros and requested once per year.
The local church tax, collected by the congregation itself, serves to provide additional funding for church work directly on site. This is an official part of church tax and can therefore be deducted in full as a special expense.
Some examples of churches that collect local church tax are the Evangelical Lutheran Church in Bavaria, the Protestant churches in Rhineland and Palatinate, and the Roman-Catholic Diocese in Limburg (Rhineland-Palatinate).
Special church tax
If a married couple that is assessed together (Zusammenveranlagung) is part of two different religious denominations (konfessionsverschiedene Ehe), church tax due on their income tax is divided equally in half – even if one of the spouses has little or no income.
A faith-diverse marriage (glaubensverschiedene Ehe) is when one spouse is either not a church member or part of a church that does not collect church tax while the other spouse is obliged to pay church tax. If the liable spouse has little or no income and should therefore not pay church tax, the “special church tax” is due instead.
Special church tax is not collected uniformly even though it was introduced nationwide. The assessment basis is the couples’ joint taxable income minus child allowances and it comes to about one-third of the church tax rate. Special church tax does not apply if your joint income doesn’t exceed 30,000 euros. This tax is very controversial as it indirectly causes the non-liable spouse to pay church tax.
You can avoid special church tax in two ways: either the liable spouse leaves the church, or the couple is individually assessed (Einzelveranlagung) instead of together – but then they would miss out on the savings received from splitting their income.
Leaving the church
If you decide to leave the church, you must inform either the register office (Standesamt) or district court (Amtsgericht) depending on who is responsible for this in your municipality. You will need to bring either your ID or passport and sign the resignation form (Austrittsformular) on site. Following this, you will receive a confirmation that you have left the church and your liability to pay church tax will end (without replacement) in the following month or one month after that, depending on state.
Important: Keep the confirmation that you’ve left the church forever. Even decades after leaving the church, the tax office can request that you pay a church tax – you alone have to proof that you are no longer a part of the church.