Einkommensteuer is a form of tax that is paid on income in Germany.
One of the main forms is Lohnsteuer which is taken directly out of your wages, but other forms of income such as dividends, rent, interest and some pensions are also taxed in this way.
There is a Freibetrag which is the amount you can earn without paying tax on it. How much this is depends on your tax class.
To hear a simple explanation and a short discussion in German, listen to the podcast:
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Disclaimer: this podcast is a simple explanation for non-native speakers. For tax advice, please contact a Steuerberater.
