How is the average tax rate determined

Tax rate: you should know that


In connection with taxes, there is always talk of the tax rate: income tax rate, top tax rate, reduced tax rate or marginal tax rate. But what exactly do these terms mean? And how high is your own tax rate? We want to shed light on tax rates and have put together the most important information on the subject. Which tax rate applies to you can be found in the tax assessment. 


Entry tax rate, top tax rate & Co.

When it comes to the tax rate, there are three important percentages. On the one hand, the input tax rate, which is at least 14 percent for taxpayers with a low taxable income. On the other hand, there is the top tax rate, which is 42 percent tax on income. For taxpayers with a particularly high income, the tax office digs even deeper into their pockets - with a tax rate of 45 percent.


Income tax rate: Ascending according to income level

The income tax rate comes into play when we make our tax return. Depending on the amount of income, our income is taxed at a certain tax rate. For example, with an annual gross income of € 36,800, the tax rate of 20% is applied. That means exactly € 7,361 in taxes. This tax rate, with which the income is generally taxed, is also called Average tax rate


The average tax rate is not the same for every income. Because tax legislation is fundamentally based on the principle of fair taxation. This means that those who earn a lot should also give a lot to the community. Therefore, the tax rate rises depending on the income level. While the tax rate is 20% for an annual income of € 36,800, it is 25% for an annual gross income of € 52,450. Because of this slope one speaks of a progressive tax rate.


When calculating their tax burden, many taxpayers naturally wonder how much more tax they will have to pay if, for example, they receive a raise in salary and thus earn a higher gross annual income. The quick calculation of the additional tax burden can be carried out using the marginal tax rate.