Income Tax for Students
Income tax (Lohnsteuer) is levied regardless of your status as a student. This means that students who work alongside their studies must also pay income tax if they exceed certain income thresholds. The amount of tax depends solely on your tax class (Steuerklasse) and your earnings—being a student has no influence on this. Therefore, the obligation to pay income tax applies to every employee as soon as their taxable income exceeds the monthly or annual tax-free allowances.
Tax Refunds via the Tax Return
If more income tax was withheld during the year than was actually required, employees have the opportunity to reclaim the overpaid tax from the tax office (Finanzamt) by filing a tax return (Steuererklärung). During the tax return process, the authorities check whether an employee has paid too much tax—for example, because their total income was below the basic tax-free allowance (Grundfreibetrag), they can claim income-related expenses (Werbungskosten), or other tax allowances were overlooked.
A tax return is particularly beneficial for students who:
Worked only temporarily during the year (e.g., during semester breaks or internships).
Were placed in Tax Class VI due to having multiple jobs, which often results in higher deductions.
Tax Projection (Annualization)
The tax projection (steuerliche Hochrechnung) used by the tax office is a method to determine the annual tax burden for employees who earn varying amounts throughout the year. This projection ensures that the monthly withheld tax matches the actual income situation as closely as possible, helping to avoid both large back payments and unnecessarily high monthly deductions.
How it works: The tax office calculates the monthly tax based on the current month's earnings, using this amount as the basis for a projection of the entire year. For example, if you have a one-time spike in monthly income, the system assumes that you will earn this amount every month of the year. Consequently, the income tax levied on that specific month is calculated to cover the projected (higher) annual tax liability.