← BlogJuly 7, 20235 min readEditorial teamDEUAENRU
For workers
The 183-Day Rule: Where Do You Pay Tax as an Employee?
Do you work in Germany but live in another country? Then the question is where you pay tax. The 183-day rule often comes up, but it applies only in certain cases.
What the 183-day rule says
Many double taxation treaties set out which country may tax income from employment. As a rule it is the country where you work. The 183-day rule provides an exception. It applies only if all three conditions are met at the same time: you stay in the country of work for no more than 183 days within twelve months, your employer is not based in the country of work, and the wage is not borne by a permanent establishment in the country of work.
Why it usually does not help with German employers
If you are employed by an employer in Germany, the second condition is not met. Germany may then tax the wage from day one, even if you only stay a few weeks. In temporary agency work, the client is often treated as the economic employer. So the rule can only help in special cases, for example when you are posted by a foreign employer, and even then further details matter.
Limited or unlimited tax liability?
Anyone with a residence or habitual abode in Germany is subject to unlimited tax liability. A habitual abode generally exists if you stay longer than six months continuously. Those who work here but have no residence are subject to limited tax liability. The wage is taxed; the consequences for allowances and tax returns differ.
What happens in everyday life?
Your employer deducts wage tax from your pay every month. For this they need your tax identification number. The amount depends on the tax class. The structure of the statement is explained in the article on the payslip. After the year ends you can often file a tax return and get back tax you overpaid.
Social security is a separate topic
Tax is separate from social security. Where you are socially insured follows different rules, for posted workers for example the A1 certificate.
What you can do
- Keep your payslips and your tax ID.
- Note your days of stay in Germany.
- Ask about your tax class before you leave.
- If unsure, get advice from a wage tax assistance association or a tax adviser.
This article is not tax advice.
Frequently asked questions
Do I pay tax in Germany if I only work two months?
Usually yes, if you are employed by a German employer. The 183-day rule typically does not help here.
What is the tax ID?
A personal identification number your employer needs for wage tax. Ask them how to get it.
Can I get tax back?
Often yes. After the year ends you can file a tax return. Whether it pays off depends on your case.
Does the rule apply to social security too?
No. Social security follows its own rules, such as the A1 certificate for posted workers.