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Jump right in:

• The basics of banking in Germany
• How to open a bank account as a non-resident
• An overview of the German tax system
• Filing a tax return
• Social security basics

What types of bank accounts are there?

Once in Germany, you’ll need a Girokonto to take care of your finances. This is your current account through which you’ll receive your salary, pay rent, and more.

You typically do not receive interest on a Girokonto. Depending on your bank and the specific services associated with the account, it may be free or cost up to 15 EUR a month. For students, they’re almost always free.

Saving accounts are typically split into two types: a Tagesgeldkonto lets you access your money at any time, while you cannot touch your money on a Festgeldkonto until the end of its fixed term. Due to this setup, interest rates are usually lower for Tages- than for Festgeldkonten.

You need to be able to prove financial self-sufficiency — maybe because you’re an international student or on a job-seeker visa? Then you should look into getting a blocked account, called Sperrkonto. Of the initially deposited money, only a set amount may be withdrawn per month.

Last but not least, Depots are used for trading in stocks, ETFs, or bonds.

What bank cards are available in Germany?

When opening an account in Germany, make sure to also check which (if any) card comes with it — and whether it meets your needs. The Girocard is often still the default, at least with traditional banks. It’s based on a domestic debit system that links your card directly to your current account (Girokonto).

While this card typically work well in person and in Germany, you can quickly hit its limits when trying to shop online or use it abroad.

For that reason, most banks now offer Girocards with a Visa or Mastercard co-badge to also benefit from the latter’s global payment services. This basically makes them a Debit Card. Debit Cards are also directly connected to your account, so anything you spend will be deducted right away.

In contrast, a “true” Credit Card (Kreditkarte) means there’s some time between your purchase and payment. You’re typically billed once a month and at no interest.

The exception here are so-called revolving credit cards where you can pay in instalments and carry a balance. But be careful, interest on this balance is usually very high! Another subgroup are prepaid credit cards, where you first must transfer money onto the card to be able to use it.

Over the years, acceptance of debit and credit cards in Germany has improved a lot. However, you may still encounter places where it’s “Girocard only” — or even “cash only”.

Do I need cash to get by in Germany?

For decades, cash was the payment method in Germany, and cashless options were the exception rather than the rule.

This has slowly been changing, especially following the corona pandemic when contactless methods were heavily promoted. By 2024, card payments amounted to close to two-thirds of retail turnover. And other cashless options like Apple or Google Pay are on the rise, too.

However, according to a 2026 YouGov survey, close to three-quarters of Germans still say they primarily pay in cash. And in our own Expat Insider survey, 22% of expats in Germany disagreed that it’s easy to pay without (vs. 6% globally), placing Germany last for this point.

So best make sure to always have a few euros on you, just in case.

How do bank transfers work?

In Germany, one of the most common forms of transaction is a bank transfer (SEPA Überweisung). To complete a transfer, you’ll need the recipient’s name and IBAN. Based on the latter, you’re then shown and can doublecheck the name of the receiving bank as well.

A money transfer within Germany may take around one business day and is usually free. Instant SEPA transfers (������ٳ��𾱳�ü������ɱ𾱲��ܲԲ����) are also possible and often even the default.

For international transfers, you’ll additionally need the BIC (within the EU) or SWIFT code (rest of the world) of the receiving bank.

How do standing orders and direct debit work?

A standing order (Dauerauftrag) is a regular payment you can set up to send money to other people, companies, or your other accounts. It can be changed or canceled whenever you want.

A direct debit (Bankeinzug), on the other hand, is set up by the organization to which you are making a payment. This is only possible if you give explicit permission, called direct debit authorization (�����Գ��ܲ��������ä����پ����ܲԲ�), to the recipient’s bank to withdraw an agreed sum from your account on a regular basis (e.g., for phone bills and other utilities). You can revoke the permission at any time. It is also possible to reverse recent payments.

How much are banking fees?

Online-only banks tend to not charge anything for managing your regular account.

The same may be true with a traditional bank, but pricing very much depends on the specifics of your account. For example, it may be free when you meet a minimum monthly deposit. Or your account is free, but you get charged for associated services like transferring money.

So when comparing your options, make sure to pay close attention to the fine print. “Hidden” costs may come up for card(s) for your account, cash deposits, cash withdrawals (in general or at third-party ATMs), printed statements, overdraft conditions, and more.

International banks in Germany

Especially Frankfurt is home to many foreign banks, including US giant Goldman Sachs and the Royal Bank of Scotland, living up to its reputation as the financial epicenter of Germany.

However, these banks typically focus on corporate and high-net-worth clients rather than your regular Girokonto services. Read on to find out how to open the latter.

Step 1: Pick your bank

Your options range from traditional banks with local offices to online-only banks, also referred to as neobanks.

If you want in-person services or are looking to deposit cash money, traditional banks are the way to go. Popular options include:

• Deutsche Bank
• Commerzbank
• Postbank
• HypoVereinsbank (UniCredit)
• Sparkasse
• Volks- und Raiffeisenbank

As mentioned, neobanks are online only. But this also means you usually enjoy an easy remote setup and no or very low banking fees.

Well-known neobanks include:

• N26
• Revolut
• bunq
• C24
• TradeRepublic
• Wise

You can use the by the Federal Financial Supervisory Authority to check your options.

Step 2: Make sure you have all your paperwork ready

Whether you have an appointment in person or plan to open an account online, you’ll at minimum need:

• A valid national ID (EU citizens) or passport (non-EU citizens)
• Visa or residence permit (Aufenthaltstitel) for non-EU citizens
• Proof of address registration (Meldebescheinigung)

The Meldebescheinigung (or Meldeschein) is a certificate you must get by registering with your local town hall within 14 days of moving to your new address in Germany. Some neobanks may not require this immediately as long as you can provide a German address to ship your bank card to.

More traditional banks may also require proof of regular income, such as your employment contract or recent pay slips.

All German banks will need your tax ID. However, you don’t need to provide this right on opening an account if you’re still waiting to receive your German one.

Step 3: Open your account & verify your identity

To open an account in person, enquire at the branch of your choice whether you’ll need a dedicated appointment or can just drop in. Bring your paperwork with you. The bank will then make a copy of your ID/passport for their files as proof of your identity.

If you’re opening an account online, simply follow the steps on the banking website/app of your choice. One of these will be a verification of your identity either through PostIdent or VideoIdent.

VideoIdent is the faster option here, consisting of a short video call where you’ll be asked to verbally confirm your details and show your identification.

PostIdent takes a little longer: you’ll be provided a reference you need to take to a participating branch of the Deutsche Post. Their employees will then ID you and send the confirmation to your bank.

You’ll encounter a range of different taxes in Germany, including:

• Einkommenssteuer / Lohnsteuer: income tax
• Kirchensteuer: church tax
• ���DZ����岹������ä�ٲ����ܲ����������: solidarity surcharge
• Umsatzsteuer: VAT of 19% or 7% (reduced for essentials like food)
• Excise duties on e.g., alcohol, fuel, energy, coffee, and tobacco products
• Kapitalertragssteuer: capital gains tax on interests and dividends
• Erb- or Schenkungssteuer: tax on gifted or inherited assets

This is not an exhaustive list. If you own a company or are self-employed, you’ll most likely also encounter the Gewerbesteuer (trade tax). And there are further levies if you’re e.g., buying or owning property.

The tax year runs from 1 January to 31 December. In case you must file a tax return, you can do so until 31 July the following year. More on this below.

What is the income tax in Germany?

The income tax system in Germany is “progressive”, meaning the amount you pay increases the higher the tax bracket you fit in to. Tax rates range from 0% to 45%.

Your income tax obligation further varies depending on whether you’re employed or self-employed. Married couples who file their taxes together also benefit from more favorable rates than single taxpayers.

The table below shows the standard income tax rate (Lohnsteuer) for individuals’ annual, taxable income in 2026:

You can calculate your income tax with (in German).

Up to 2021, an additional “solidarity surcharge” (���DZ����岹������ä�ٲ����ܲ����������) based on your income tax was due. This has been dropped for all but high-end earners who pay an annual income tax of 20,350 EUR or more.

How to pay income tax

If you’re employed, the Lohnsteuer as well as your social security contributions will typically be directly deducted from your salary by your employer (PAYE).

You just need to provide your tax identification number and a few details (e.g., date of birth). They can then access all your relevant tax information from the German central revenue service (Bundeszentralamt für Steuern) and add you to the company payroll.

If you are self-employed, you’ll need to do your own tax returns.

Taxes for self-employed people

Among self-employed people, Germany differentiates between Freiberufliche (liberal professionals, e.g., lawyers, doctors, journalists, artists) and Gewerbetreibende (traders / commercial business people):

Next to their income tax, Freiberufliche may have to charge and pass on VAT.

The same is true for Gewerbetreibende, who additionally will need to cover trade tax (Gewerbesteuer) with their local municipality.

Thanks to dedicated rules aiming to make business easier for small entrepreneurs (Kleinunternehmerregelung), neither group has to pay any Umsatzsteuer (VAT) if their annual turnover remains below a certain threshold.

An additional corporation tax (��ö�����������󲹴ڳٲ����ٱ�ܱ��) of 15% only applies to profits generated by corporations (GmbH, AG, UG).

To get started, you need to inform the German tax authorities about your business:

• If you haven’t already, create an account on with your personal SteuerID (personal tax ID) that you received after registering your residence in Germany.
• Once you have access, file the Fragebogen zur Steuerlichen Erfassung registration form.
• If applicable, request your USt-IdNr (VAT-ID) as well.

You should receive your business tax id (Steuernummer) within a few weeks — careful, this 13-digit number is not the same as the 11-digit Ust-IdNr (VAT-ID). You’ll need to add either to any invoices you issue.

As you can see, German bureaucracy is no joke. Especially if you don’t speak German, you may want to get professional help for these steps and/or for your annual tax returns.

Church tax

If you’re part of a participating religious community and earning income, you’re automatically required to pay church tax (Kirchensteuer) in Germany. Church tax is then 8 or 9% of your annual income tax, depending on where you live.

Participating communities include:

• Roman Catholic Church
• Evangelical Church
• Old Catholic Church
• Jewish Communities (then typically referred to as Kultussteuer)
• Some smaller religious communities

Muslims, Buddhists, Jehovah’s Witnesses, and Orthodox Christians do not collect church tax through the state.

To opt out, you must leave the church officially. This involves going to your Standesamt (civil registration office) or Amtsgericht (official court), bringing your ID and Meldebescheinigung (certificate of registration in Germany). In some federal states, you may have to pay a small processing fee.

If you’re married, you must also bring your Heiratsurkunde (marriage certificate). Note that if you receive a letter or questionnaire from the church-tax office afterwards, you are not legally obligated to complete and return it.

Who has to file?

If you have a registered address in Germany or spend more than 183 days in a calendar year in the country, you count as a tax resident and are liable for tax on your worldwide income.

As mentioned above, if you’re employed in Germany, your employer will deduct any income taxes directly from your salary. You typically do not have to file a tax return then.

Filing is mandatory in the following cases, though:

• You receive foreign income of over 410 EUR a year
• You worked for multiple employers in a calendar year
• You’re self-employed or a business owner
• You receive state benefits of over 410 EUR a year
• You and your spouse are filing together with the tax classes III and V

However, even when you don’t have to file, you might want to. There are various tax deductions that can help to reduce your taxable income and potentially lead to a refund.

Tax deductions you should know

Home office deductions: A flat rate of 6 EUR for each day you work primarily from home (max. 1,260 EUR annually)

Even higher deductions might be possible with a dedicated office space in your home (Arbeitszimmer), but requirements for this are much stricter.

Commuting costs: 0.38 EUR per kilometer for your daily commute to work (as of 2026)

Childcare expenses: Up to 80% of childcare costs for children under 14 (as of 2026; max. 4,800 EUR per child per year)

Education and training expenses (if job-related education)

Charitable donations to registered charities (up to 20% of your total income)

Further deductions may apply, so it often pays to invest in tax software or even a tax advisor. Incidentally, you can deduct the costs for these, too.

Recommended tax & finance apps for expats

Managing taxes can be streamlined with the following tools:

• : Official German tax portal for electronic submissions
• : An intuitive app guiding users through the tax filing process in English
• : Tailored for expats, offering a user-friendly interface for tax declarations
• : Designed for freelancers, this app combine banking with tax management features
• : Specialized tax tool for freelancers

Anyone working in Germany pays at least 19.7% of their gross salary to social security (as of 2026). This includes:

• Pension insurance: 9.3%
• Unemployment insurance: 1.3%
• Health insurance: 7.3% plus a supplement (Zusatzbeitrag) set by your health insurer; in 2026, these average at about 1.45%
• Long-term care insurance: 1.8% (or 2.4% if you’re childless)

Your employer matches these contributions and furthermore pays into Germany’s accident insurance program.

You can find out more about social security in our article on Working in Germany.

Are foreigners eligible for a pension refund?

51�ԹϺ����� a tenth (9.3%) of your monthly salary is automatically transferred to the German pension system.

If you’re a non-EU citizen, you might be able to apply for a lump sum refund of these contributions and don’t have to wait until you reach retirement age. See if this is an option for you with this .