Tax Changes Germany 2026 explained for expats
In 2026 the German tax-free allowance rises to 12,348 EUR (+252 EUR), Kindergeld to 259 EUR per child per month (+4 EUR), and the top tax rate of 42 % only kicks in from 69,879 EUR taxable income. The changes come from the Steuerfortentwicklungsgesetz (StFortEG), passed on 30 December 2024.
Key Takeaways
- Grundfreibetrag rises to 12,348 EUR. Income below remains tax-free.
- Kindergeld goes up by 4 EUR to 259 EUR per child per month.
- Top rate (42 %) now starts at 69,879 EUR taxable income.
- Pendlerpauschale: flat 0.38 EUR per km from the first kilometre.
- Soli kicks in only above 20,350 EUR of annual income tax (single).
- Legal basis: Steuerfortentwicklungsgesetz (StFortEG) from 30 December 2024.
Key Changes at a Glance
Six numbers most German taxpayers will feel in 2026. Comparison 2025 → 2026.
Tax-Free Allowance (Grundfreibetrag)
Kindergeld (per child)
Child Tax Allowance
Top Tax Rate Starts At
Soli Income-Tax Threshold
Commuter Allowance
Income tax brackets in Germany 2026
The German income tax follows five zones, defined in § 32a EStG . The numbers below apply to single filers; married joint filers get double values through the Splittingtarif.
| Bracket | Taxable income from | to |
|---|---|---|
| Tax-free zone (0 %) | 0 EUR | 12,348 EUR |
| First progression zone (14 % – 24 %) | 12,349 EUR | 17,443 EUR |
| Second progression zone (24 % – 42 %) | 17,444 EUR | 69,878 EUR |
| Top rate (42 %) | 69,879 EUR | 277,825 EUR |
| Wealth surcharge (45 %) | from 277,826 EUR | — |
Source: Federal Ministry of Finance (BMF), Steuerfortentwicklungsgesetz of 30 December 2024. Rounded to full euros.
What does it mean in practice? Three sample cases
Simplified examples without extra deductions. People who actually file a return usually get a higher refund on top.
Single, 45,000 EUR gross
Family, 2 kids, 65,000 EUR
High earner, 90,000 EUR
Your actual situation will differ. For a precise estimate use the official BMF income tax calculator.
Commuter allowance reform: a flat 0.38 EUR/km
The structural change in 2026 is the Pendlerpauschale. Until 2025 the rate was 0.30 EUR for the first 20 km of one-way commute and 0.38 EUR from km 21. From 1 January 2026 the split is gone. It is a flat 0.38 EUR per kilometre, starting at the first kilometre. A 5 km commute now generates roughly 100 EUR more deductible expenses per year. For long-distance commuters not much changes.
Legal basis: § 9 EStG. More detail: Pendlerpauschale 2026 in-depth guide.
Solidarity surcharge 2026: higher threshold
Most people in Germany no longer pay the Soli (a 5.5 % surcharge on income tax). In 2026 the annual threshold rises to 20,350 EUR of income tax for singles (2025: 19,950 EUR). That is roughly a gross income of 73,000 EUR. Married joint filers reach the line at double the amount. Above the threshold there is a sliding scale before the full Soli rate applies.
Examples and edge cases: Finanztip · Solidaritätszuschlag (German) and the official BMF page on the surcharge.
Tax tips for 2026 in Germany
Track your work expenses
The employee flat-rate (Arbeitnehmerpauschbetrag) stays at 1,230 EUR. Any deductible expenses beyond that – work equipment, training, job applications, commuting – reduce taxable income one euro at a time. Keep receipts.
Check your tax class
Married couples can choose between classes 3/5 and 4/4. The choice does not change the annual tax bill but changes monthly cash flow. You can switch classes once per year at the Finanzamt – more often after life events.
Use the home office allowance
You get 6 EUR per home office day, up to 210 days per year, so up to 1,260 EUR. A separate study is not required. Mixed days (morning at home, afternoon at the office) also count.
Frequently Asked Questions about German tax 2026
What is the German tax-free allowance in 2026?
The tax-free allowance (Grundfreibetrag) rises to 12,348 EUR per person in 2026 (2025: 12,096 EUR). Income below that line stays tax-free. Married couples filing jointly get double, so 24,696 EUR. The change is automatic through the official wage tax tables.
How much is Kindergeld (child benefit) in 2026?
Kindergeld is 259 EUR per child per month in 2026 (2025: 255 EUR), paid by the Familienkasse. The Federal Employment Agency adjusts it automatically once approved – you do not need to file a new application.
How does the commuter allowance work in 2026?
From 1 January 2026 the Pendlerpauschale is a flat 0.38 EUR per kilometre from the very first kilometre to work. The previous split (0.30 EUR for the first 20 km and 0.38 EUR from km 21) is gone. Short commuters benefit the most.
When does the top tax rate of 42 % kick in for 2026?
The top rate of 42 % applies from 69,879 EUR of taxable income in 2026 (2025: 68,430 EUR). Joint filers double that. The 45 % wealth surcharge (Reichensteuer) starts from 277,826 EUR.
Who still pays the solidarity surcharge (Soli) in 2026?
The Soli (5.5 % of income tax) only applies above an annual income tax of 20,350 EUR for singles in 2026. That corresponds to a gross income of roughly 73,000 EUR. Joint filers reach the threshold at double the amount. A sliding scale applies above the limit.
Where do I file my German tax return for 2026?
The easiest way is online through ELSTER, the official tax portal. If you want help, you can use a Lohnsteuerhilfeverein or a tax advisor (Steuerberater). The standard deadline for tax year 2026 is 31 July 2027; with a Steuerberater the deadline extends to April 2028.
Why is the term "kalte Progression" relevant in 2026?
When wages rise only with inflation but the tax brackets stay the same, you slide into higher brackets and pay a larger share in tax without earning more in real terms. Germany adjusts the brackets every year. The 2026 update is covered by the Steuerfortentwicklungsgesetz (StFortEG) from December 2024.
Sources and legal status
- Federal Ministry of Finance · What changes in 2026
- EStG § 32a · Income tax brackets
- German Bundestag · Steuerfortentwicklungsgesetz (Dec 2024)
- Finanztip · Allowances and flat-rates 2026
- Federal Employment Agency · Kindergeld 2026
This article is general information and does not replace individual tax advice. Data status: 17 May 2026. For your personal situation talk to a tax advisor (Steuerberater) or Lohnsteuerhilfeverein.