Finance and taxes

Opening a bank account

As soon as you have registered your residential address and are working in Germany, you will need a German bank account. The current account (Girokonto) is especially used to pay bills such as rent and to settle regular expenses. Your salary will also be paid directly into your current account. A German account is a prerequisite for many services in Germany, including the telephone line or insurance. To open an account, you need a valid passport and the certificate confirming your resident status (Meldebescheinigung), i.e. you must already have registered your residence in Germany.

Before opening an account, you should look carefully at the fees for managing the account and performing transactions. Banks in Germany – and particularly in the region Düsseldorf – County of Mettmann – where you can open an account as an expat include Sparkasse, Targobank, Commerzbank, Deutsche Bank, and Volksbank.

Taxes

Every person newly registered in Germany will receive a personal tax identification number by post from the Federal Central Tax Office. The tax identification number is a standard national and permanent eleven-digit identification number for tax purposes and should be kept somewhere safe and communicated to the employer.

As an employee, you receive a salary that is taxed at source. The most important tax for skilled workers and managers as employed persons is therefore the income tax, i.e. the tax on your salary. Your employer will remit the income tax to the tax office each month as ‘pay-as-you earn’ tax (Lohnsteuer) for you. You don’t have to worry about anything for now. However, you should keep all tax-related documents in a safe place. The amount of income tax you pay depends on your income. The higher the income, the higher the tax rate. Your tax band (Steuerklasse) is also important for the determining the amount of tax paid. It is based on whether you are married or have children, for example. If you are a member of the Church, your employer will also remit church tax (Kirchensteuer) to the tax office.

It is important for tradespeople or self-employed persons to take into account other forms of tax and seek comprehensive advice from a tax consultant (Steuerberater).