Germany's basic tax-free allowance (Grundfreibetrag) increased to €12,348 for 2026, up from €11,784 in 2025 — a rise of €564. For joint filers (Ehegattensplitting), the allowance doubles to €24,696.
What it means in cash
For a single filer earning €45,000 gross:
- 2025: first €11,784 tax-free, rest progressively taxed
- 2026: first €12,348 tax-free — saves roughly €89/year in income tax (at the ~14-16% entry rate applied to the shifted €564)
At higher incomes where the marginal rate is 42%, the shift to the tax-free band saves about €237/year — every euro moved out of the taxable base saves you your marginal rate.
Solidaritätszuschlag threshold also rises
The Solidaritätszuschlag (solidarity surcharge) threshold lifts to €19,950 income tax liability for singles (€39,900 joint) before you owe 5.5% on top. Only ~10% of German taxpayers owe Soli now — mostly high earners.
Kinderfreibetrag
The per-child tax-free allowance rose to €6,672 (€3,336 per parent for joint filers) for 2026. Combined with the Kinderfreibetrag structure and Kindergeld (€250/child/month), families with 2+ children often see Kindergeld as the better option — the Finanzamt automatically calculates which is more favourable (Günstigerprüfung).
Werbungskosten pauschale unchanged
The flat-rate work-expenses deduction stays at €1,230/year. If you have actual expenses exceeding this (commute, home office, work equipment), itemize — but the flat rate is automatic for most employees.
Home office flat rate
€6/day × max 210 days = €1,260/year. Unchanged for 2026 and now permanent (post-COVID legislation).
What to do
1. Update your gross-to-net expectation — a small tailwind for take-home pay in 2026. 2. Re-check Lohnsteuerklasse if your household situation changed in 2025. 3. File Einkommensteuererklärung if you have significant Werbungskosten, Sonderausgaben, or outside-employment income.
Our DE income-tax calculator is updated with the 2026 Grundfreibetrag and full progressive zone formulas.