For members


Ehegattensplitting: How did Germany’s marriage tax law become so controversial?

Ehegattensplitting, literally translated as “spouse splitting,” is a German policy which allows married couples to save taxes by dividing their income. Some argue that the policy, in place since the 1950s, should be abolished.

Ehegattensplitting: How did Germany's marriage tax law become so controversial?
Photo: picture alliance/dpa | Rolf Vennenbernd

How does Ehegattensplitting work?

Ehegattensplitting refers to how married couples’ income taxes are calculated under the German law. At the end of a financial year, couples can opt to file taxes jointly through Ehegattensplitting. If they choose to do so, the income of the two spouses will be added together and then halved. 

The tax authority calculates taxes for the couple’s average income and then doubles that amount to arrive at a final tax figure. The total amount of income taxes owed to the government based on Ehegattensplitting is often less than the amount owed if each partner had filed separately. 

READ ALSO: Everything you need to know about paying taxes in Germany

The optional system benefits couples in which one partner makes substantially more than the other, and it also applies to marriages in which only one spouse earns an income. Single-earner couples will typically reap the most benefits. On the other hand, if both partners earn roughly the same amount, they gain no advantage from Ehegattensplitting

With very few exceptions, “the elegant thing about full income splitting, as it is in place in Germany, is that there’s no constellation where a married couple pays more in taxes than two single individuals,” explained economist Katharina Wrohlich, of the University of Potsdam and DIW Berlin, in an interview with The Local earlier this year. 

Why is Ehegattensplitting controversial then?

On the one hand, advocates of the policy often cite the special status of marriage under the law and argue that marriage is a cooperative economic arrangement which should be recognised as such. 

On the other hand, critics have suggested that the law can often discourage women from working – either at all or in part-time positions – and that it is unfairly preferential to higher-income households.

Wrohlich explained the gender-equality-based criticism this way: “The drawbacks are that both partners face the same marginal tax rate. So, the secondary earner, which is mostly the woman in Germany, faces a much higher marginal tax rate than she would if she were taxed individually.”

As a result, “there are very strong negative incentives to either take up work or to increase working hours, in particular for married women,” she said.

Timm Bönke, an economist at Free University Berlin, noted that even though some spouses will be discouraged from working, there is “no loser” because the couple also gains tax advantages.

Instead, according the Bönke, “the disadvantage is that Germany loses a lot of money by having [Ehegattensplitting] because it is discouraging work and, on the other hand, you have a lot less revenue from taxation,” which could go towards funding education or child care, for example. 

Another criticism has to do with social policy.  As Wrohlich explained, “This kind of tax subsidy through income splitting increases with income. So, very high-income couples profit much more from this kind of policy than families with low incomes. And this is perceived to be very unfair, at least among some people.”

Additionally, some critics argue that Ehegattensplitting ought to take into account whether or not a family has children. 

Two wedding rings on a text reading ‘joint assessment’. Photo: picture alliance/dpa/dpa-tmn | Andrea Warnecke

What is the history behind Ehegattensplitting?

Married couples in Germany have not always enjoyed these tax benefits. In fact, in the years prior to the late 1950s, many German couples were at a financial disadvantage when it came to taxation. This disadvantage resulted from the progressive tax system first introduced in the 1920s, whereby higher incomes are taxed at higher rates.

Under this system, a married couple would jointly pay taxes at the higher rate associated with the sum of their income. As a result, the typical married couple would pay more in taxes than they would have as unmarried individuals. 

READ ALSO: ‘Ja, ich will’: What it’s like to get married in Germany

By the early 1950s, the added tax burdens on some married couples — often called the “marriage penalty tax” — had garnered public concern.  In 1957, the German Federal Constitutional Court ruled that the existing tax law discriminated against married people and was thus unconstitutional.

Although several alternative policies were considered, the German legislature ultimately passed the Tax Amendment Act of 1958 which introduced Ehegattensplitting. It has been in effect ever since.

Since the 1950s, the German Constitutional Court has upheld the constitutionality of Ehegattensplitting. In 1982, the court defended the policy under the premise that it properly recognizes marriage as a cooperative arrangement. In 2013, the German government allowed civil partners, including same-sex partners, to split their income for tax purposes, as well.

What are possible alternatives to Ehegattensplitting?

Since its inception, several reforms to Ehegattensplitting have been put forth. 

One possible alternative to Ehegattensplitting involves a transferable tax-free personal allowance, which is the amount of untaxed income that each person is entitled to receive.  In Germany, you are entitled to a basic exemption of roughly 10,000, which decreases with higher incomes.

According to the proposed reform, “the idea is that in a married couple, both are, in principle, taxed individually, but as long as one spouse does not use up his or her own personal allowance, he or she can transfer it to their partner,” Wrohlich said. 

Another possible reform would involve moving towards the system of family tax splitting used in France. Wrohlich explained that the French and German systems are actually very similar: “In France, married people without children can do exactly the same income splitting as in Germany, only that, in addition, if they have children, they get additional splitting factors.”

In this system, income is split further for each additional child, with added benefits following the birth of the third child. 

Should we expect Ehegattensplitting to stick around?

The possibility of reforming Ehegattensplitting may gain renewed attention in light of the federal election. Within the past year, both the Greens and the centre-left Social Democrats (SPD) have proposed reforms to the policy of Ehegattensplitting.

The SPD, Greens and the Free Democrats (FDP) are currently in coalition talks to form a new government. 

Some experts are pessimistic about any radical reform to the law. Bönke told The Local earlier this year: “I don’t think that in the near future you will see that income splitting is abolished. ”

Instead, he believes it is more likely that “income splitting is opened or will be made available for different kinds of families that are not married”. But, he noted, making more people eligible for income splitting will likely disincentivise even more people from taking up work. 

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Schooling: What you need to know when moving to Sweden with children

Sweden is often cited as one of the best countries in the world for raising children, but what do international parents need to know when planning a move here with their family? And can your children access schooling without a Swedish personal number?

two children on a swedish farm
From the age of six, every child in Sweden has access to free education. Photo: Ann-Sofi Rosenkvist/

Depending on your child’s age, there are a few things you should be aware of when planning a move to Sweden. If you’ve recently arrived in the country and didn’t have to apply for residence permits before entering, you and your family may not yet have their Swedish personnummer – the 10 or 12-digit personal number linked to everything in Sweden from healthcare to gym memberships. This guide will give you some advice on how you can sign your child up for school before they have received their personnummer.

Firstly, you may be wondering how the Swedish school system works. Sweden has three different types of school: the first type of school is voluntary preschool – förskola – for children from 1-6 years of age.

Starting at 6 years of age, schooling is compulsory, starting with förskoleklass, a one-year preschool class as a sort of bridge between preschool and primary school. Then, from age 7, primary or grundskola starts. Grundskola stretches from age 7-16 and is split into three stages: lågstadiet for 7-9-year-olds, mellanstadiet for 10-12-year-olds and högstadiet from 13-15. From the year a child turns 16, they can attend gymnasieskola (which is voluntary in theory, but many Swedish jobs require a gymnasie diploma) – lasting three years.

Some schools offer both grundskola and gymnasieskola, some only offer some of the grundskola stages, so check directly with any schools you are considering to see how many stages they offer if you want your child to stay in the same school for the majority of their schooling.

Check out the websites Skolverket and Skolinspektionen for more information on Swedish schooling.

How much does it cost?

The vast majority of schooling in Sweden is free, apart from förskola, where fees are heavily subsidised by the state and are income-based – costing a maximum of 1,510 kronor ($175) per child per month in 2021. Free school meals are also offered for all children. For teenagers at gymnasium level it is up to the municipality to decide whether school meals are free or have to be paid for.

Many independent schools – such as bilingual and international schools – are also free to attend. It’s also helpful to know that these schools aren’t allowed to charge for textbooks or school trips.

There are a few fee-paying private schools in Sweden, but not as many as in other countries.

If you’re moving to Sweden with teenagers, they might qualify for a study allowance (studiestöd). This is available to young people between 16 and 20 attending gymnasium full-time, and amounts to 1,250 kronor a month, paid out from September to June. It is possible in some cases to get this study allowance without a personal number, but you will need to contact the Swedish Board of Student Finance (CSN) directly to register. See more information here to find out if your child qualifies.

The type of school you need to apply for will depend on your child’s age. Photo: Maskot/Folio/

How do I apply?

Many schools, especially in the big cities, have long waiting lists, so it pays to sign your child up early. If you have a personnummer, the sign-up process is relatively simple – for förskola and grundskola, your municipality website will have an online sign-up service (e-tjänst) which you can sign in to with your BankID. If you’re still waiting for your personnummer, this process is a bit more difficult – you can still apply, but you will most likely have to apply via a paper form.

Even if your child does not yet have a personal number, they still have the right to attend school while they wait for their personal number application to be processed – you may have to supply documents showing that your family intend to stay in Sweden for an extended period of time before your child can access schooling – your municipality will be able to help you with this.

Contact your municipality if you are unsure of which form you should use and who you should send it to. They should be able to help you if you move to Sweden after application windows for schools in your area have already closed. If your child is old enough to attend grundskola or gymnasieskola, you may need to contact the school directly for advice on how to apply.

This is part of The Local’s series about what you need to know when moving to Sweden with children. If there are any particular topics you would like us to cover next, you can always email our editorial team at [email protected]. We may not be able to reply to every email, but we read them all and they help inform our coverage.