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Comment by brazzy | Hacker News Reader

> your personal income-tax rate got applied. Which is most likely 45% if you work in any tech-related position.

The 45% bracket starts at 277.826 € in 2022. That is definitely not the kind of money people in a "tech-related position" in Germany routinely earn.

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Yup. But that's marginal tax rate. Average tax rate for e.g. 150k EUR income is 37.8%.

See https://www.bmf-steuerrechner.de/ekst/eingabeformekst.xhtml

That’s surprisingly low, not too different from US tax rates!

The employee has to pay a ton of social security contributions and insurance in Germany, which in many other countries are paid by the employer, making the net salary most likely about half of the gross salary.

True! But it's also worth noting that those contributions are capped in Germany. This is different from other EU countries such as Portugal. For pension the cap is ~85k. For public health insurance is ~58k EUR, but you can opt out of this and get private health insurance instead as well.

Yes, you are correct. My fault.

It is 42% if your income is higher than 57.918 Euro (2021). Most tech-related positions will achieve that.

The 42% income tax is the marginal rate and it's the one for singles.

Try https://www.bmf-steuerrechner.de/ekst/eingabeformekst.xhtml

As an example, for 60,000 Euros (a more typical magnitude) your tax rate will be 26.55% if you are single, 16.73% if you are married (using splitting).

So the crypto gains will be taxed at 42% because these are presumably on top of your salary.

Money is fungible. You could equally say the crypto is taxed at a lower rate but then (a larger part) of your salary would be taxed at the higher bracket.

Income streams on the other hand are not nearly that fungible. You can either work full time or not at all most of the time.

So unless you can turn crypto trading into a full time (or more precisely minimum salary) gig, it is a marginal activity taxed at the marginal tax rate.

The decimal as a thousands separator made me read that as a much smaller number, and I was surprised that Germany calculated tax rates to 3 decimal digits.

For other confused people, read that as: €277,826.

Uh, yeah. I copied that straight out of German Wikipedia without paying attention to the number formatting.

99% of techies I know who are also financially literate enough to be stacking sats are in the top 5% bracket income-wise. I know that because I know what sort of offers suggested by me they have rejected. If the 5-th percentile of tech pay in Germany is around that amount, I can't tell.

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