Social Security & Taxes

Taxes and Social Contributions

A woman explains a document for a couple

People who come to Germany with a research scholarship are usually exempt from taxation. It is advisable, however, to consult the scholarship provider on this subject. You should also clarify whether you may become liable to pay tax on the scholarship in your home country.

If you have a contract of employment with a higher education institution or research institution and if you work in Germany for longer than half a year (183 days), you have to pay normal taxes and social contributions. Income tax is paid directly to the government by the employer. The level of taxation depends on income, family status and tax category.

Double taxation agreements exist with a large number of countries to prevent foreigners being taxed simultaneously in Germany and their country of origin. These agreements define where taxes have to be paid. Additionally, there are agreements with a number of countries on the taxation of researchers. Which agreements apply has to be determined in each individual case. The human resources department of your employer or the tax office should be able to provide assistance on this matter.

You will also find more information and answers to frequently asked questions at: www.euraxess.de

Social Insurance

Anyone who concludes a contract of employment with a research institution in Germany has to pay the contributions to the social insurance laid down by law. The social insurance is an insurance fund under federal administration. It is based on the principle of contributions and benefits and is a social institution for general welfare. Contributions are shared between employer and employee. They are automatically deducted from the employee’s salary by the employer and paid to the insurance fund. As a rule, scholarship holders are not liable to contribute to social insurance (with the exception of health insurance). Citizens of countries that have concluded a social insurance agreement with Germany should check whether their insurance cover extends to employment in Germany.

You will find an overview of the bilateral social security agreements outside the European Union on the website of the Federal Ministry of Labour and Social Affairs:
www.bmas.de