There seems to be a conundrum involved in the sewing on of these little buggers… so here it is, step-by-step instructions on how to prepare them and apply them to a German wool tunic.
Step 5: Fold each end back at an angle, making sure that the angle matches the angle of the Waffenfarbe “lights” (which will also be the same angle as the collar on the tunic). The end result will be a rhomboid shape.
You are now ready to sew the Litzen onto the collar. They should be sewn just inside the stitching on the collar, roughly 1cm from the outside edge.
Pre-war and early collar tabs were sewn onto a reinforced bottle-green backing (much like the embroidered SS collar tabs). This was abandoned when field-gray collars became commonplace (about 1940), and sewn directly to the collar instead.
A note about Waffenfarbe
There still seems to be some confusion on this issue; here are the facts: During the early and mid-war period, the Litzen with specific branch Waffenfarbe still seem to be prevailant, but by 1944 or so, the generic all-gray tabs were used for all branches. The all-dark green Litzen were generally used by Panzergreandiers for early or mid-war. Of course, with anything German, you would see a mix of anything and everything at the end of the war, so early Waffenfarbe could still be seen on collars alongside the late gray ones.
Information courtesy of “At the Front”