Ibrahim Gardner
Germany is a popular destination for PhD students, with traditional PhD programmes making up the majority of doctoral degrees in the country. When it comes to taxation, it's important to understand the specific rules and regulations that apply to PhD students in Germany. While student status in Germany does not directly lead to reduced taxation, low incomes and scholarships are typically not subject to tax. Additionally, Germany has double taxation agreements in place with various countries to prevent individuals from paying taxes in multiple locations.
| Characteristics | Values |
|---|---|
| Student status and taxation | Student status does not lead to reduced taxation in Germany. Instead, low incomes and scholarships are not subject to tax. |
| PhD salary | PhD students with a 50% working hours contract are paid half the salary of a full employee in the same Engelt group. |
| PhD status and pay band | PhD status is no guarantee of promotion to the next pay band. |
| PhD and double taxation agreements | Germany has double taxation agreements in place with many countries to ensure that you are not required to also pay taxes in your home country. |
| PhD and research scholarships | If you come to Germany on a research scholarship, you will normally be exempt from tax, but there are some exceptions. |
| PhD and health insurance | The cheap student rate is not available for PhD students if they have a Master's degree already. |
| PhD and experience level | A fresh PhD student will be in Stufe 1, after finishing the first year, you will promote them to Stufe 2. |
| PhD and employment contract | In their first postgraduate position, it is essential that PhD graduates ensure that the contractual term is at least 12 months and that they will be employed for a full year with no interruptions. |
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What You'll Learn
Student status does not reduce taxes
In Germany, student status does not lead to reduced taxation. Instead, low incomes and scholarships are not subject to tax. The maximum amount for scholarships before they are taxed is higher for non-Germans. As a student, health insurance is also cheaper, but PhD students are unlikely to benefit from this.
PhD students with a 50% working hours contract are paid half the salary of a full-time employee in the same Engelt group. However, the working expectations are similar to those of a full-time employee. The level or grade of your tax is called "Lohnsteuerklasse" in German. The taxing authority assigns you to a certain Lohnsteuerklasse based on your circumstances.
The salary of PhD students in Germany is based on "Tarifvertrag für den Öffentlichen Dienst der Länder (TV-L)", which translates to "the Collective Agreement for the Public Service of the states". As a PhD student, your salary will be defined in various remuneration (Entgelt (E)) of TV-L. Entgelt is the level of payment set by the employer and reflects the formal duties of the job and the level of competencies of the employee. For example, Entgelt 13 to 15 (TV-L E13-15) is for employees with academic higher education.
If you come to Germany on a research scholarship, you will usually be exempt from tax. However, there are some exceptions, such as founder's scholarships that aim to create a technology-oriented or knowledge-based product with great market potential. Doctoral students or postdocs who obtained their first university degree more than ten years ago may also be subject to taxation. It is important to discuss this with your scholarship provider and check whether your scholarship will be liable to taxation in your home country.
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PhD scholarships and low incomes are non-taxable
In Germany, PhD students are not considered students for tax purposes. Student status does not lead to reduced taxation in Germany. Instead, scholarships and low incomes are non-taxable. If you come to Germany on a research scholarship, you will usually be exempt from tax, although there are some exceptions. For example, founder's scholarships that aim to create a technology-oriented or knowledge-based product with great market potential may be taxed. Doctoral students or postdocs who obtained their first university degree more than 10 years ago may also be taxed.
PhD students in Germany are typically employed on half-time contracts, earning half the salary of a full-time employee in the same Engelt group. Despite the reduced working hours, the workload expectation is often similar to that of a full-time employee. The salary of PhD students in Germany is based on the "Tarifvertrag für den Öffentlichen Dienst der Länder (TV-L)", which translates to "the Collective Agreement for the Public Service of the states". As per this agreement, the salary of PhD students, postdocs, and professors is defined by various remuneration (Entgelt) levels. For instance, Entgelt 13 to 15 (TV-L E13-15) is designated for employees with academic higher education, while Entgelt 9 to 12 (TV-L E9-12) is for those with a completed technical college education.
The net salary of PhD students in Germany is influenced by factors such as working hours, tax grades, and experience levels. A PhD student with a 50% working hours contract and a TV-L E13 (100%) tax grade can expect a gross salary of 4002.26 Euros per month and a net salary of 2379.31 Euros per month. A married student in this situation whose partner is not working can benefit from further tax reductions, increasing their net salary to 2702.31 Euros per month.
It is important to note that the tax system in Germany can be complex, and there may be exceptions or special circumstances that apply to individual cases. While many PhD students may fall into the category of having non-taxable scholarships or low incomes, it is always advisable to consult with the local tax office, tax advisory services, or the HR department of the university or institution for specific information regarding tax obligations.
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PhD salary is based on Tarifvertrag für den Öffentlichen Dienst der Länder (TV-L)
In Germany, student status does not lead to reduced taxation. Instead, low incomes and scholarships are not subject to tax. PhD students on a research scholarship are usually exempt from tax, although there are some exceptions. For example, doctoral students who obtained their first university degree more than 10 years ago may be liable for taxation.
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PhD students with a 50% working contract get paid half of a full employee
In Germany, PhD students with a 50% working contract are paid half the salary of a full employee in the same pay group. The salary for employed doctoral candidates in Germany is based on a collective agreement. The pay is determined by the number of working hours in comparison to the working hours of a full-time employee. This is known as "Arbeitszeit" in German, and for PhD students, this value is generally 50%, 67%, 75%, or in exceptional cases, 100%.
A 50% working contract for a PhD student typically involves fewer teaching assistant duties, such as tutoring or lab instruction, than a 100% contract. However, it's important to note that PhD candidates with part-time contracts may still need to invest significant time in their studies outside of their contracted hours, including thesis writing and research.
Regarding taxation, student status in Germany does not directly lead to reduced taxation. Instead, low incomes and scholarships are generally not subject to tax. If you are on a scholarship, it is important to discuss with your provider whether your scholarship will be liable for taxation in your home country, as Germany has double taxation agreements in place with many countries. Additionally, doctoral students who obtained their first university degree more than 10 years ago may be subject to taxation on their scholarships.
For those receiving a salary, the net salary is influenced by the "Lohnsteuerklasse," which corresponds to the level or grade of tax. A single PhD student would typically be in tax class I, while a married student with a working partner would be in tax class IV or V. The tax class impacts the amount of income tax and other deductions from the gross salary, resulting in the net salary.
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PhD students pay less tax if married to a non-working partner
In Germany, student status does not lead to reduced taxation. Instead, low incomes and scholarships are not subject to tax. However, if you are a PhD student in Germany who is married and your partner is not working, you can change your tax grade (Lohnsteuerklasse) to III, which will result in you paying less tax and taking home more money. For example, a single PhD student on Lohnsteuerklasse I with a TV-L E13 (50%) contract has a monthly gross salary of 2001.13 euros and a net salary of 1370.49 euros. On the other hand, a married PhD student with a non-working partner on Lohnsteuerklasse III with the same contract would have a monthly gross salary of 4002.26 euros and a net salary of 2702.31 euros. This is 268.52 euros more per month than a person in tax class I.
It is important to note that the taxation situation for PhD students in Germany depends on how their studies are funded. If you are a PhD student in Germany on a research scholarship, you will usually be exempt from tax. However, there are some exceptions, such as founder's scholarships that aim to create a technology-oriented or knowledge-based product with great market potential. Additionally, doctoral students or postdocs who obtained their first university degree more than 10 years ago may also be subject to taxation.
Furthermore, as a PhD student in Germany, you may not be eligible for the same benefits as other students, such as cheaper health insurance or access to cheaper food in the student canteen. This is especially true if you have already obtained a Master's degree, in which case you will be required to pay the "regular" rate for health insurance, although the university will cover a portion of it.
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Frequently asked questions
Student status does not lead to reduced taxation in Germany. However, low incomes and scholarships are typically not subject to tax. The maximum amount for scholarships before they are taxed is higher for non-Germans.
The amount of tax paid by PhD students in Germany depends on factors such as their income, marital status, and whether they have children. For example, a married student whose partner is not working can take home more by paying less tax.
The salary of a PhD student in Germany depends on various factors, including their contract, working hours, and level of experience. A PhD student with a TV-L E13 (100%) contract earns a gross (before-tax) salary of 4002.26 Euros per month. Their net (after-tax) salary is 2379.31 Euros per month.
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