essential terms explained in plain language.
115 terms
Tax assessment notice — official document from the Finanzamt stating how much tax you owe or are owed.
Ihr Abgabenbescheid für das Jahr 2023 ist beigefügt.
Income tax return — annual filing required for most employed persons in Germany.
Tax office — the local German tax authority responsible for processing tax returns and assessments.
Tax-free allowance — the amount of income or assets exempt from taxation. Common examples: Grundfreibetrag (basic personal allowance ~€11,604/year), Kinderfreibetrag (child allowance), Sparerpauschbetrag (saver's allowance €1,000/year).
Trade tax — a municipal tax levied on business income in Germany.
Church tax — an additional income tax (8–9% of income tax) automatically deducted from members of recognised religious communities (Catholic, Protestant). You can opt out by formally leaving the church (Kirchenaustritt).
Wage tax — income tax withheld directly from employee salaries by the employer.
Letter from the tax office — official correspondence from the German tax authority.
Solidarity surcharge ('Soli') — additional tax on income/corporate tax, now abolished for most taxpayers.
Tax ID (Steueridentifikationsnummer) — permanent 11-digit number assigned at birth/first registration, unlike Steuernummer which can change.
Tax class (bracket) — one of 6 classes (I–VI) assigned to employees in Germany that determines how much income tax is withheld from wages. Depends on marital status and employment situation.
Als Verheirateter wurde Ihnen Steuerklasse III zugewiesen.
Tax identification number — 10-13 digit number assigned by the Finanzamt for tax filings.
Tax prepayment — quarterly advance payments of income or corporate tax required from self-employed persons and businesses, based on estimated annual tax liability.
Value-added tax (VAT) / sales tax — the German equivalent of VAT, currently 19% standard rate (7% reduced).
File reference number — a unique case number assigned by an authority to identify your case.
Administrative decision / notice — an official ruling by a government authority that has binding legal effect.
Registered mail — postal service providing proof of delivery, required for most legal correspondence.
Certificate of inheritance — official document proving your right to inherit an estate.
Deadline — a legally binding time limit for responding to or filing an official document.
Debt collection agency — a company hired by creditors to collect overdue debts. Inkasso letters are common but you should verify the legitimacy and the debt before paying.
Payment order — court-issued demand for payment. If not contested within 2 weeks, becomes an enforcement order.
Ein Mahnbescheid wurde gegen Sie erlassen.
Dunning notice / payment reminder — a formal written demand for overdue payment.
Garnishment / seizure — legal enforcement action where wages or assets are seized to satisfy a debt.
Attachment exemption limit — the minimum income that cannot be seized by a creditor through wage or bank attachment. Protects basic living expenses. Updated annually.
Compulsory share of inheritance — the minimum share of an estate that close relatives cannot be disinherited from.
Debt counselling — free or low-cost professional advice for people with debt problems. Available through Caritas, Diakonie, consumer centres (Verbraucherzentralen), and municipalities.
Power of attorney — legal document authorising someone to act on your behalf.
Enforcement title — a legally binding document (e.g. a final court judgement or a non-contested Mahnbescheid) that allows a creditor to enforce payment through bailiffs.
Formal objection — written appeal against an administrative decision. Must be filed within 1 month.
Sie haben das Recht, gegen diesen Bescheid Widerspruch einzulegen.
Certificate of service — proof that a legal document was officially delivered.
Service charge statement — annual breakdown of operating costs (heating, water, maintenance) for your rental.
Owner — the legal owner of a property.
Land register — official register of property ownership maintained by the Amtsgericht.
Termination notice — formal cancellation of a contract (e.g. rental, employment, insurance).
Hiermit kündigen wir Ihren Mietvertrag fristgerecht zum 30.06.2024.
Tenant — the person renting a property.
Rental deposit — security deposit, legally capped at 3 months' net rent in Germany.
Rental contract — the legal agreement between tenant and landlord governing the tenancy.
Additional costs / service charges — costs beyond the base rent (heating, water, waste, maintenance) billed annually.
Landlord — the person or company renting out a property.
Citizens' benefit (formerly ALG II / Hartz IV) — means-tested social assistance for those who cannot support themselves.
Parental allowance — income replacement benefit for parents who take time off work after having a child.
Reduced earning capacity pension — a pension paid to people who can no longer work full-time due to illness or disability. Full reduction if unable to work more than 3 hours/day.
Child benefit — monthly payment from the Familienkasse for each child. Currently €250/month per child.
Care allowance — cash benefit paid by statutory long-term care insurance (Pflegeversicherung) to those needing care.
Pension — monthly payment received from the statutory pension insurance (Rentenversicherung) upon retirement.
Pension application — the formal application to start receiving retirement or disability pension benefits. Should be submitted 3 months before desired start date.
Pension assessment notice — official notification from the Deutsche Rentenversicherung confirming the approved pension amount, start date, and calculation basis.
Ihr Rentenbescheid vom 15.01.2025 liegt bei.
Retirement age — the statutory age at which a person becomes entitled to full pension benefits in Germany. Currently 67 for those born after 1964.
Pension insurance — mandatory contribution-based pension system in Germany (Deutsche Rentenversicherung).
Broadcasting fee (ARD/ZDF) — mandatory monthly fee of €18.36 per household for public broadcasting.
Social security number (12 digits) — required for employment, healthcare, and pension in Germany.
Insurance record / contribution history — a document from the Deutsche Rentenversicherung showing all periods of employment, contributions, and insurance credits throughout your career.
Electronic health card (eGK) — the chip card issued by your health insurance (Krankenkasse) that you must present at every doctor's visit. Contains your name, photo, and insurance data.
Statutory health insurance (GKV) — mandatory public health insurance covering ~90% of the German population. Contributions are income-based and split between employer and employee.
Health insurance contribution — monthly amount deducted from salary for statutory health insurance.
Health insurance — mandatory in Germany. Either statutory (GKV) or private (PKV).
Long-term care insurance — mandatory insurance covering costs of professional care in old age or disability.
Private health insurance (PKV) — optional private insurance for self-employed, civil servants, and high earners above the income threshold (~69,300 €/year). Usually offers broader coverage than GKV.
Deregistration — formal process to deregister your address when leaving Germany.
Registration of residence — mandatory registration at the local Einwohnermeldeamt within 2 weeks of moving in.
Residence permit — temporary permit allowing non-EU citizens to live and work in Germany.
Residence title — the general term for all types of residence permits in Germany.
Immigration authority — the office responsible for issuing and renewing residence permits for non-EU citizens.
Tolerated stay — temporary suspension of deportation, not a full residence permit but allows you to stay temporarily.
Residents' registration office — the local authority where you must register your address (Anmeldung).
Permanent residence permit — unlimited right to live and work in Germany.
Passport — international travel document.
Severance pay — a one-time payment from an employer to an employee upon termination of employment, often negotiated as part of a termination agreement (Aufhebungsvertrag). Not legally required but common.
Federal Employment Agency (Bundesagentur für Arbeit) — manages unemployment benefits (ALG I) and job placement.
Work permit — authorization for non-EU citizens to work in Germany.
Unemployment benefit — ALG I is contribution-based; ALG II (Bürgergeld) is means-tested support.
Employment contract — the legal agreement between employer and employee.
Employment reference letter — a formal document issued by an employer when an employee leaves. Required for most job applications in Germany. Einfaches Zeugnis (basic) or Qualifiziertes Zeugnis (with performance assessment).
Employment agency — government office managing Bürgergeld (ALG II) and job placement services.
Protection against dismissal — legal protections preventing employers from terminating employment without just cause.
Short-time work — a government-supported scheme allowing employers to temporarily reduce working hours instead of laying off staff. Employees receive Kurzarbeitergeld (approx. 60–67% of lost net wages) from the Agentur für Arbeit.
Probationary period — the initial period of employment (typically 3–6 months) during which either party can terminate the contract with 2 weeks' notice and without needing to state a reason.
Die Probezeit beträgt 6 Monate.
Tax exemption order — instruction to your bank to not withhold tax on investment income up to €1,000/year (2024).
Checking / current account — the standard bank account for daily transactions in Germany.
Liability insurance — covers damage you cause to third parties. Highly recommended in Germany.
Direct debit — an automated payment where a creditor pulls money from your account with your pre-authorisation.
Credit reference agency — Germany's main credit rating agency. A negative SCHUFA score can affect loans, rentals, and mobile contracts.
Import VAT (EUSt) — a 19% (or 7% for certain goods) value-added tax charged on goods imported into Germany from non-EU countries, in addition to any customs duty.
Customs clearance — the process of paying applicable duties and taxes on imported goods so they can be released by customs and delivered.
Customs declaration — the formal document declaring goods being imported or exported, their value, origin, and purpose.
Customs assessment notice — official notification from German customs (Zoll) stating the customs duty and/or import VAT owed on a shipment.
Ihr Paket wurde verzollt. Bitte begleichen Sie den Zollbescheid.
Customs duty-free allowance — the maximum value of goods you can import without paying customs duty. Currently €150 for shipments from outside the EU.
Monthly advance payment — fixed monthly amount paid to a utility provider (electricity, gas, water) as an estimate of actual usage. Reconciled annually.
Ihr monatlicher Abschlag beträgt 85 Euro.
Standing charge / base fee — a fixed monthly fee charged by utility providers (electricity, gas, water, internet) regardless of actual consumption.
Annual utility bill — the yearly settlement comparing actual energy consumption against your monthly advance payments. Results in either a refund or an additional payment.
Ihre Jahresabrechnung ergibt eine Nachzahlung von 142 Euro.
Kilowatt-hour (kWh) — the standard unit of energy used in German utility bills to measure electricity and gas consumption.
Additional payment — the extra amount owed after the annual energy bill if actual consumption exceeded the advance payments made throughout the year.
Meter reading — the current reading of your electricity, gas, or water meter. You must report it to your provider at the end of the year or when moving. Used to calculate your exact annual bill.
Fine / penalty — an administrative financial penalty for traffic violations (speeding, parking offences, etc.). Notified via a Bußgeldbescheid.
Sie haben eine Geschwindigkeitsüberschreitung begangen. Ihr Bußgeld beträgt 70 Euro.
Vehicle title document (Zulassungsbescheinigung Teil II) — proof of ownership for a vehicle. Must be kept safe; required when selling or re-registering a vehicle.
Mandatory vehicle inspection (HU/TÜV) — a compulsory roadworthiness test required every 2 years for most vehicles in Germany. Carried out by authorised bodies (TÜV, DEKRA, GTÜ).
Ihr Fahrzeug ist zur Hauptuntersuchung fällig.
Annual vehicle tax — a tax levied on motor vehicle owners in Germany, calculated based on engine displacement and CO₂ emissions. Collected by the Hauptzollamt.
Vehicle registration — the official registration of a motor vehicle with the local road traffic authority (Straßenverkehrsamt). Required to drive on public roads.
Patient's own contribution — the portion of medical or care costs that the patient pays themselves, not covered by insurance. Common in nursing care (Pflegeheim).
Panel doctor (GKV-contracted physician) — a doctor licensed to treat statutory health insurance (GKV) patients. The Kassenärztliche Vereinigung oversees their admission.
Sick pay from health insurer — paid by your statutory health insurer (Krankenkasse) from the 43rd day of illness onwards (after employer sick pay ends). Approximately 70% of gross salary.
Hospital referral / admission — a formal doctor's order admitting a patient to hospital for inpatient treatment. Required for your health insurer to cover inpatient costs.
Statutory co-payment — the fixed amount GKV insured patients must pay out-of-pocket for medicines (€5–10 per package), hospital stays (€10/day), and aids. Capped at 2% of annual gross income.
Für dieses Medikament fällt eine Zuzahlung von 10 Euro an.
Citizens' service centre — the local government office where residents register their address, obtain ID documents, and access most municipal administrative services.
Certificate of good conduct — official document issued by the Bundeszentralregister (Federal Central Criminal Register) proving you have no criminal convictions. Often required for job applications, childcare roles, or visa applications.
Business registration — the formal registration of a commercial business (Gewerbe) with the local trade office (Gewerbeamt). Required before starting any commercial activity in Germany.
Registration confirmation — official document from the Bürgeramt confirming your registered address in Germany. Required for opening a bank account, registering a car, or applying for residence permits.
German national identity card — compulsory for all German citizens from age 16. Serves as valid travel document within the EU/EEA. Issued by the Bürgeramt.
Change of address registration — mandatory registration of a new home address at the local Bürgeramt within 14 days of moving. Required by German law.
Old-age pension — monthly retirement benefit paid by the statutory pension insurance (Rentenversicherung) once you reach the statutory retirement age (67 for those born after 1964).
Ihr Antrag auf Altersrente wurde ab dem 01.08.2025 bewilligt.
Company/occupational pension — additional pension provided by an employer, separate from the statutory pension. Contributions are paid from gross salary (Entgeltumwandlung).
Ihre Betriebsrente beträgt monatlich 320 € ab Renteneintritt.
Pension point — unit used to calculate the statutory pension. One Entgeltpunkt is earned each year you earn exactly the national average wage. The final pension is the number of points × current pension value (Rentenwert).
Basic pension supplement (Grundrente) — top-up benefit for people who paid into the pension system for at least 33 years but earned low wages. Automatically calculated by the Deutsche Rentenversicherung, no application needed.
Survivor's pension — pension paid to the spouse, registered partner, or dependent children of a deceased insured person. Includes Witwenrente (widow's pension) and Waisenrente (orphan's pension).
Der Anspruch auf Witwenrente besteht ab dem 1. des Folgemonats.
Riester pension — state-subsidized private pension scheme for employees. Savers receive government bonuses (Zulage) and tax deductions for regular contributions.