PhD Handbook

18 Depending on your institute, there are differences between the liability of PhD students with employment contracts and scholarship holders. According to the different guidelines it is either obligatory or only recommended for PhD students to have a liability insurance. 4.2 THE GERMAN TAX SYSTEM The German tax system is, like many taxation systems, complicated. Below is some basic information, primarily for international doctoral candidates, to help to orientate yourself with how your income will be taxed. If you are liable for tax in Germany, your employer will automatically deduct all taxes, social security and health insurance contributions from your monthly salary and pay this to the respective local revenue office. You need to register for a tax number at the financial office in your city or on the internet and submit your tax identification number to your employer. Short-term employee from overseas If you have a contract of employment with your institution and you stay in Germany for less than six months, you pay taxes in your home country. Stipend/Scholarship holders If you are granted a stipend or fellowship, you are not obliged to pay taxes for this income in Germany. However, you may have to pay taxes in your home country. Please ask your stipend-giving institution for more information on this. Long-term employee (longer than six months) If you stay longer than six months, you automatically become liable for income tax and social security contributions in Germany. In order to avoid paying taxes both in Germany and your home country, there are double taxation agreements with a number of countries, which define the country in which your tax contribution has to be paid. The human resources department at your institute or your tax department from your home country will be able to give you detailed and specific information regarding your tax situation. The tax identification number (Steueridentifikationsnummer, IdNr) may automatically be sent to you after having registered at your local registration office. Alternatively you might need to visit your local financial office (“Finanzamt”) or the internet to register for your IdNr. How much your income is taxed depends on several factors, such as number of children, marital status, income, etc. As a rule of thumb, the more you earn the more taxes you have to pay (taxation rates vary from 14% to 45%). As of August 2013, all salaries are subject to a tax-free “basic tax allowance” of 8,130€ a year (8.354€ in 2014) if you are not married and 16,260€ a year (16,708€ in 2014) per married couple. The “basic tax allowance” increases the more children you have. In order to take the different situations into account, every employee is classed into one of the following income tax brackets (Steuerklasse, StKl.): • StKl. I: Single, divorced, or widowed and with no children • StKl. II: Single parents who live alone • StKl. III: Married employees can choose this tax bracket if one of the spouses does not work or has considerably less income than the other. • StKl. IV: If both spouses earn more or less the same amount, this bracket benefits them. • StKl. V: Open to married employees if their spouse is in bracket III JUN 3 COMPLETING YOUR PHD WITHIN THE HELMHOLTZ ASSOCIATION HELMHOLTZ JUNIORS l 4 BEYOND THE PHD - SOCIAL SECURITY AND DUTIES

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