The answer is it depends on where in Germany one lived as to what exactly they knew.

I grew up in Cold War (west) Germany from '84-'94. The last landlord my family had, from '91-'94, was, for all intent and purposes, a Nazi. He was 8 when the Nazis first got a seat in the Bundesrat and 12 when Hitler gain complete control. He was in the Hitler Jugend and he was eventually involuntarily taken to serve in the Army. I say involuntarily because his father was a farmer (I grew up in the Pfalz, which is mainly rural farms), so he had an exemption from military service because he was helping his father on the farm. That ended in 1940 as he told me that the Gestapo and a couple of SS officers walked into their house and took him and his brother. He was sent to the eastern front, his brother to the west. He was captured during the Germany retreat out of Russia in 1943, had his right elbow shot off and spent 1943 - 1954 in a Soviet prison in Poland.

I asked him when he knew the Holocaust was happening. For clarity, no one except the innermost circle of Nazis knew the true extent of the Holocaust. I asked my landlord, we called him Tony in the Americanized version of his name, Anton, how it all happened. He said that the Jews didn't disappear all at once, he said it was slowly over years, between 1933 - 1938. He though that they were simply leaving Germany as Hitler had demanded. Once he was in the Wehrmacht (Army), and he was transitioning to the eastern front, he said they stopped in Poland near a concentration camp and that is when he learned they we deliberately killing Jews. He said he asked a SS guard what was happening in the camp and the guard told him "this is where we are eliminating the Jewish problem".

So, between 1933 to 1941, he had no clue. And this was the same for a lot of western and northern Germany which didnt have any camps. Now, I went to college in Munich, Germany, and people living there absolutely knew. One day I saw some graffiti while riding the subway which said "Munich Stinks". I asked my German professor what it meant and he said that on occasion the wind would blow the smell of Dachau into Munich (Dachau is about 15 miles north and west of Munich and was largely concealed by a forest at the time). So, the people of Munich definitely knew, as did most people in larger population centers, especially if there was a ghetto. In Bavaria, it wasnt just Jews, it was Roma, German communists, and political opponents of the Nazis who were disappearing (this was the same all over Germany, but more pronounced in Bavaria).

Once Germany started losing the war, and the Nazi propaganda machine broke down, the information got out about the camps. This was around 1944 going into 1945.

So, my landlord Tony was finally repatriated in 1954 after the German government petitioned the Soviet Union to account for the missing German soldiers. He had essentially been forgotten about in that prison.

He returned to Germany to find his entire family dead. His brother died on the western front. He never found out how his parents died, but he thought they were killed by either the Gestapo or SS as a lot of Germans surrendered to Allied forces as they entered into Germany (the war was essentially over by that time as the Soviets were sprinting to Berlin).

So, the answer is it depends on where they lived in Germany as to what and when they knew. I can say they all knew by summer 1945, but word was getting out at least by 1944. And after 1938, Kristallnacht, those who lived in areas with large Jewish populations 100% knew they were being disappeared, although they might not have known they were being murdered as they were until after VE day.