Tax relief

The home office allowance can be applied for up to 210 days per year from 2023. An income tax deduction of 6 euros is possible for income tax purposes. That is a maximum of 1,260 euros per year.

Low-income earners will receive relief in terms of social security contributions. The income threshold for midi jobs has been increased to 2,000 euros as of January 1, 2023.

The employee lump sum for income tax purposes has been increased by 200 euros to 1,200 euros. Income-related expenses can now be claimed at a flat rate of €1,200 without submitting receipts.

In order to cushion the particular burdens of single parents, the relief amount was increased from 4008 euros in 2022 to 4260 euros in 2023. If there are several children, the relief amount will increase by 240 euros per child from the second child onwards.

The basic tax-free allowance will be increased by €561 to €10,908 from January 1, 2023 and by a further €696 to a total of €11,604 from January 1, 2024.

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The top tax rate will be raised from 58,597 euros to 62,810 euros in 2023. From 2024, the top tax rate will be levied from an annual income of €66,761.

Employees who commute to work will receive a flat rate of 38 cents (previously 35 cents) from the 21st kilometer.

If the collective bargaining partners agree on additional payments, the federal government is prepared to make a payment to employees in the amount of 3,000 euros tax-free - i.e. without deducting taxes and social security contributions.

Taxpayers will be able to fully deduct their pension contributions from January 1, 2023 (two years earlier than planned). In future, pensions are to be taxed in the payout phase in old age. As compensation, expenses for old-age provision can be claimed for tax purposes during employment.

Special regulations for short-time working allowances have been extended until June 30, 2023 for the safety of employees and companies.

On January 1, 2023, the new citizen's income replaced the previous unemployment benefit II (known as Hartz IV) and social benefit. From 2023, a single adult will receive 502 euros - 53 euros more than before.

The standard rates for children have also been significantly increased - by 33 to 44 euros more per month depending on age. In future, the requirements will no longer be adjusted retrospectively, but prospectively in line with inflation rates.