Money & taxes
Lohnsteuer
Lohnsteuer is German wage tax: income tax withheld directly from each payslip by the employer. Thanks to the €12,348 basic allowance (2026), working students earning up to roughly €1,300 gross monthly usually pay none, and overpaid amounts come back via the tax return.
Lohnsteuer is not a separate tax but the collection method for income tax on employment: the employer calculates and withholds it every month based on your tax class and forwards it to the Finanzamt. The progressive rate starts at 14% above the basic allowance and rises with income. Solidarity surcharge and, for registered church members, church tax piggyback on the same deduction.
Because monthly withholding annualizes your salary, irregular income leads to overpayment: a well-paid three-month internship is taxed as if you earned that salary all year. The annual income-tax return (Steuererklärung) recalculates reality and refunds the difference.
What it means for working students
Most working students earning €1,300 gross or less per month see zero Lohnsteuer in 2026 under tax class I. If you earned more in some months, worked a paid internship, or were briefly on class VI, filing a return is usually free money; students reclaim several hundred euros on average. You can also deduct study costs: for a master's degree or second degree, tuition, laptop, and commuting count as Werbungskosten and can even create a loss carryforward into your first full-time year.