Trade Tax Calculator (Germany)
Calculate your expected Trade Tax (Gewerbesteuer) including allowance, tax base amount, municipal multiplier, quarterly prepayments & visualization.
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📌 How is the result calculated?
Explanation (Short but Useful)
Trade Tax (Gewerbesteuer) sounds dry, but it is one of the most important levers when planning profits, building reserves, or comparing business locations. This calculator doesn't just provide a final sum, but makes the logic behind it transparent: From the trade earnings, the "Tax Base Amount" (Steuermessbetrag) is calculated first, which is then projected to the actual Trade Tax using your municipality's "Hebesatz" (Multiplier).
Crucial here is the term "Trade Earnings" (Gewerbeertrag). Although based on profit (EÜR or Balance Sheet), it is adjusted in trade tax law through additions (Hinzurechnungen) and deductions (Kürzungen). Because these items vary greatly by business, the calculator asks for "Trade Earnings". If you don't know the exact figure yet, start with your Profit as an approximation and adjust later.
The calculation works in four steps: (1) Trade earnings are rounded down to the nearest full 100 $. (2) Then – depending on legal form – the Allowance is deducted: 24,500 $ for Sole Proprietorships and Partnerships, 5,000 $ for certain other legal entities (e.g., associations). Corporations (e.g., GmbH/AG) have no allowance. (3) The Basic Tax Rate (Steuermesszahl) of 3.5% is applied to the remaining amount. The result is the Tax Base Amount. (4) The Tax Base Amount is multiplied by the local Multiplier (Hebesatz) (Example: 400% = Factor 4.0). This results in the final Trade Tax. The multiplier is set by the municipality; unless set higher, a minimum of 200% applies.
Bonus for Partnerships/Sole Proprietors: The trade tax paid can be partially credited against personal income tax (§ 35 EStG). The calculator shows you an optional "Potential Credit" as an upper limit: strictly speaking up to 4x the (proportional) tax base amount, capped by the actual trade tax payable. Whether you can fully utilize this cap in practice depends on how high your tariff income tax is and what proportion of it is attributable to commercial income. The "Net Burden" in the calculator is therefore an orientation – not a tax assessment.
Also important for liquidity planning: Trade tax is often collected via quarterly prepayments (typically Feb 15, May 15, Aug 15, Nov 15). If you estimate an annual tax here, you can roughly divide by four to derive a typical quarterly payment. With the "Scenario Link", you save your inputs directly in the link and can quickly compare variants (different multiplier, legal form, profit) or send them to your team. Via "Print", you get a clean result overview as a PDF via browser printing.
FAQ
Which number should I enter?
Ideally, use the Trade Earnings from your planning or previous year. If you only know the profit, use that as a starting value and refine later with realistic additions/deductions.
What happens with a Loss or 0 $?
With 0 $ or negative trade earnings, no trade tax is due. Loss carryforwards are not calculated in detail here; the calculator shows 0 $ in this case.
Do I have to pay Trade Tax as a Freelancer?
Purely freelance activities (Freiberufler like doctors, lawyers, artists) are generally not subject to trade tax. However, as soon as a commercial business exists or commercial activities predominate, trade tax may arise.
Why does my GmbH have no allowance?
The allowance is intended for natural persons and partnerships. Corporations pay trade tax starting from the first Dollar of trade earnings.
Where do I find the Multiplier (Hebesatz)?
Most reliably in your last trade tax assessment notice or on the website of your municipality. The Hebesatz is a percentage value and acts as a multiplier on the tax base amount.
Why does my result differ from the tax assessment?
Common reasons are specific Additions/Deductions, Loss offsetting, changes during the year, rounding rules, or the breakdown (Zerlegung) of the tax base amount across multiple business premises.
What does the Scenario Link do?
It writes your inputs into the URL so you can open, bookmark, or share them later – without data being sent to a server.
Trade Tax (Gewerbesteuer): The 4-Step Calculation
German trade tax (Gewerbesteuer) is a municipal tax levied on all business profits. The rate varies by municipality — it is the product of a fixed base rate and a variable municipal multiplier (Hebesatz). Here is how it is calculated:
- Trade Earnings (rounded down to nearest 100 €)Start with your trade profit (Gewerbeertrag). Sole proprietors and partnerships may add back or deduct certain items (Hinzurechnungen / Kürzungen) — for simplicity, the calculator uses the entered profit figure directly.
- Subtract Allowance (Freibetrag)Sole proprietors and partnerships: 24,500 €. Registered associations (e.V.): 5,000 €. Corporations (GmbH/AG): no allowance. The allowance is subtracted from the trade earnings to get the tax base value (Gewerbesteuer-Bemessungsgrundlage).
- × 3.5% = Tax Base Amount (Steuermessbetrag)The tax base value × 3.5% gives the Steuermessbetrag — a fixed intermediate figure set by federal law. This is the same across all municipalities.
- × Municipal Multiplier (Hebesatz) = Trade TaxThe Steuermessbetrag × Hebesatz (as a decimal, e.g., 410% = 4.1) = final Gewerbesteuer. The Hebesatz must be at least 200% by law but varies widely — typically 250–600% for most German cities.
Municipal Multiplier (Hebesatz) Reference Values 2025
The Hebesatz is set annually by each municipality. Here are the values for major German cities, which you can enter directly into the calculator:
| City | Hebesatz 2025 | Effective rate on profit (sole prop., 90k€) |
|---|---|---|
| Berlin | 410% | ~11.5% |
| Hamburg | 470% | ~13.2% |
| Munich | 490% | ~13.7% |
| Cologne | 475% | ~13.3% |
| Frankfurt am Main | 460% | ~12.9% |
| Stuttgart | 420% | ~11.8% |
| Düsseldorf | 440% | ~12.3% |
| Small rural municipalities | 250–310% | ~7–8.7% |
If you do not know your municipality's Hebesatz, the IHK (Chamber of Commerce) or your local Finanzamt website will have the current figure. In practice, few businesses relocate solely for a lower Hebesatz, but it is a real consideration for new business registrations near municipal borders.
The §35 EStG Income Tax Credit: Why Trade Tax Is Often Neutral for Sole Proprietors
The trade tax burden for sole proprietors and partnerships is largely offset at the income tax level through the §35 EStG credit mechanism. This is one of the most important and often misunderstood aspects of Gewerbesteuer:
| Aspect | Details |
|---|---|
| Credit amount | Up to 4.0× the Steuermessbetrag can be credited against your personal income tax |
| Effective cap | The credit cannot exceed the actual trade tax paid (so it does not create a refund) |
| Hebesatz break-even | At Hebesatz = 400%, the §35 credit fully offsets trade tax → net burden = 0 for most taxpayers |
| Above 400% Hebesatz | A residual trade tax burden remains that cannot be credited (e.g., at 490%, ~10% of trade tax remains uncredited) |
| Corporations (GmbH/AG) | §35 does not apply — corporations cannot offset Gewerbesteuer against KSt. Trade tax is a real, non-creditable cost for GmbHs |
The calculator shows the maximum §35 credit for sole proprietors and the estimated residual burden after credit as a planning reference. Actual credit depends on your personal income tax situation — the full offset is only realized if your income tax liability is high enough to absorb the credit.
Frequently Asked Questions
What are "Hinzurechnungen" and why are they not in the calculator?
Hinzurechnungen (§8 GewStG) are add-backs to trade profit that increase the Gewerbeertrag — such as 25% of interest expenses, 20% of rental/leasing costs, and similar items. Kürzungen (§9 GewStG) are deductions, like a portion of real estate value for property owners. For a simplified planning calculator, these are omitted because they require detailed balance sheet data. If your business has significant financing costs or long-term leases, your actual Gewerbesteuer will be higher than what this calculator shows for the same profit figure.
When are the quarterly prepayments due?
Trade tax prepayments (Vorauszahlungen) are due on February 15, May 15, August 15, and November 15 — i.e., one month earlier than income tax prepayments (which are due on March 10, June 10, September 10, December 10). The calculator shows the quarterly amount (≈ annual Gewerbesteuer ÷ 4) directly in the result. Prepayments are set by the Finanzamt based on the last assessment and can be adjusted on request.
Is trade tax deductible as a business expense?
Since 2008, trade tax is no longer deductible as a business expense for income or corporation tax purposes. Before 2008, it was deductible, which reduced the overall tax burden. Today, the only offset mechanism for sole proprietors is the §35 EStG credit described above. For corporations, Gewerbesteuer is a pure additional cost with no offset mechanism.
Does a GmbH need to pay trade tax on all profits?
Yes. Corporations (GmbH, AG, UG) are subject to trade tax on all profits without any Freibetrag (no allowance). The effective combined tax rate for a GmbH in Germany is approximately: 15% Körperschaftsteuer + 0.825% Soli + Gewerbesteuer (varies by Hebesatz) ≈ 28–33% total, depending on the municipality. For comparison, a profitable sole proprietor in a high-Hebesatz city will have a similar or slightly higher effective rate, but benefits from the §35 credit and the progressive income tax structure at lower income levels.
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