Change tax class during pregnancy: How to increase your parental allowance by thousands of euros
When you hold your positive pregnancy test in your hand, your thoughts are certainly not about your tax bracket. With a timely change of tax class before or at the beginning of your pregnancy, you can potentially get a lot out of the parental allowance.
Our guest author wants to make it easier for parents to start family life
Katharina Brunert is a project manager and mother of soon to be two children and lives with her partner, child and dog Emma. In 2018 she became pregnant for the first time and at first was quite overwhelmed with the many applications, registrations and to-do’s that suddenly came to her. So she created her own “project plan” for her first baby. Nonetheless, there were some things she wished she had known sooner that no one has pointed out to her.
That’s why she founded ” Project Parents ” in 2020 to make it easier for parents to start parenting and to support them with organizational issues during pregnancy. Since then she has been sharing useful information, tips and tricks in the blog, on Instagram , Facebook and soon also via her online course “Easy start into parenting – organized by your pregnancy”.
You should meet these requirements for more parental allowance
You should be married and employed and based on your current net salary you should not reach the maximum amount for parental allowance. As of April 2021, this is currently 1,800 euros per month for basic parental allowance. In that case, even a tax class change could not increase your parental allowance any further.
If the points just mentioned apply to you, a tax class change before or at the beginning of your pregnancy could make sense for you.
Why change your tax class before or during pregnancy?
A tax class change before or during pregnancy can be worthwhile in order to increase parental allowance. The parental allowance is calculated based on your average net income for the last 12 months before the month in which maternity leave begins. This period is called the assessment period. By changing to tax class 3, you will get a higher net salary – and thus later more parental allowance. Depending on the situation, this can amount to several €1,000 in total.
How does a tax class change during pregnancy work?
Married couples can choose from different constellations:
- Both partners in tax bracket 4
- Both partners in tax class 4 with a factor
- One partner in tax bracket 3 and the other in tax bracket 5
Typically, those who earn more are in tax bracket 3 in order to pay as little tax as possible. The partner who earns less is in tax class 5. At the beginning of the pregnancy, the person who wants to apply for most of the parental allowance should switch to tax class 3 if they were not already in tax class 3. The partner must therefore switch to tax class 5.
It is important that the application must be submitted no later than seven months before the start of your first month of maternity leave, or seven months before the birth if your partner will apply for most of the parental benefit. The new tax class only takes effect from the following month. In order for the new tax class to be taken into account for the calculation of parental allowance, you must have been in the new tax class for at least half of the time, i.e. six months, in the assessment period.
This means that you have to change the tax class as soon as you become aware of your pregnancy . Unfortunately, many people are not aware of this or realize it too late. If you are in the new tax class for at least six months of the assessment period, your average income for the entire assessment period will be calculated using the new tax class 3 to calculate parental allowance.
During pregnancy, the change in tax class as a couple would very likely result in a lower net salary than before. However, this is compensated with the tax return, so that there is no disadvantage.
This is how you change the tax class
You can find your current tax class and your net salary on your salary statement. The best thing to do is calculate for yourself how much parental allowance you would receive based on your current net salary. If you would get the maximum amount, changing the tax class can no longer get it and is therefore not necessary.
You then compare the amount with the parental allowance that you would receive based on your salary with tax class 3. For example, you can use the following calculators:
A calculation example:
Lina is 30 years old, employed, in tax class 5 and earns €1,777 net per month. Based on that, she would get about €1,101 parental allowance per month. If Lina changes to tax class 3 in good time, her net income increases to €2,426 per month. Your parental benefit would therefore amount to €1,523 per month. Assuming Lina receives parental allowance for 12 months, this results in a plus of €5,064!
What you have to consider at a wedding
You can apply for a change of tax class at your responsible tax office. You should keep in mind that the change will only take effect in the following month. If you and your partner get married during the assessment period, you can apply for a tax class change retrospectively from the month of the wedding. After the birth, you can “change back” the tax classes.
As you can see, you can legally increase your parental allowance by up to several 1,000 euros with little effort. It is definitely worth checking at an early stage whether a tax class change before or during pregnancy makes sense for you.