Now the exact figures have been determined! This is how the traffic light wants to relieve you from 2025

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Written By Pinang Driod

Federal Finance Minister Christian Lindner (FDP) introduces tax relief worth billions. Now there are official figures. The basic deduction for wage and income tax should apply from January 2025 increase by 300 euros to 12,084 euros.

Lindner has also announced that the basic deduction will be increased by 180 euros to 11,784 euros this year, retroactively to 1 January. There is no tax up to this income. An increase from 252 euros to 12,336 euros is planned for 2026.

Benefit from it especially all taxpayers and employees, who do not yet pay taxes. This should remain the case by increasing the basic allowance. In principle, the basic allowance is intended to ensure that people can afford certain things in life. This includes at least food, clothing, housing and emergency medical care.

For married couples, the basic compensation is doubled. From 1 January 2025, this will be 24,168 euros, from 2026 24,168 euros and from 2026 24,672 euros.

The tax deduction for children will be increased by 60 euros to 6,672 euros for the 2025 assessment period and by 156 euros to 6,828 euros from the 2026 assessment period.

But! The figures for the basic deduction and child benefit may still change in the autumn after the presentation of the so-called progress report.

This is how much more singles will have in their pockets by 2025

“People want to see results and not just press conferences,” says Reiner Holznagel, chairman of the German Taxpayers’ Association.

The calculation relates to the adjusted basic compensation. In the calculation, the Association of Taxpayers assumed that the additional contribution for statutory health insurance is also included in the taxable income (zvE).

This is how much a family of four will have from 2025

In this calculation, the association of taxpayers assumed a married couple with two children. Only one spouse has a full-time job.

The solidarity contribution is reduced

To compensate for the additional tax burden resulting from high inflation, the tax burden for millions of people must be adjusted. To this end, the federal government is adjusting the income tax rates for 2025, as well as the basic allowance, child benefit and the “Soli” allowance.

The term ‘cold progression’ describes a type of creeping tax increase where, for example, a salary increase is completely absorbed by the current inflation rate, but still leads to higher taxes.

Tax class combination III and V are no longer applicable

The different tax classes (III and V) for married couples will be abolished. Instead, there should be only one tax bracket for both spouses. Up until now, high earners have been taxed according to tax class III, low earners according to tax class V. While high earners pay less tax and therefore have more in their bank account, the opposite applies to low earners. After filing the tax return, money is usually refunded by the Tax Authorities, depending on the amount of taxable income.

By abolishing tax classes III and V, low incomes pay less tax and higher incomes pay more. The bottom line is that no additional burdens may arise for the couple. However, calculations show that: In some cases This creates an additional burden. And the state benefits from that.

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