Basic Tax Allowance 2025 – Tax-Free Income in Germany
The basic tax allowance is the foundation of the German tax system: Everyone has a tax-free minimum income of €12,096 per year (2025).
What is the basic tax allowance?
The basic tax allowance (Grundfreibetrag) is the amount of annual income that remains completely tax-free. It protects the subsistence level and ensures that no income tax is paid on the minimum necessary for living.
2025 values:
- Singles: €12,096 (€1,008/month)
- Married couples: €24,192 (€2,016/month)
How does the basic allowance work?
Example: - Gross annual salary: €30,000 - Basic allowance: -€12,096 - Taxable income: €17,904
You only pay tax on €17,904, not on the full €30,000!
Historical development
| Year | Basic Allowance | Increase |
|---|---|---|
| 2020 | €9,408 | - |
| 2021 | €9,744 | +€336 |
| 2022 | €10,347 | +€603 |
| 2023 | €10,908 | +€561 |
| 2024 | €11,784 | +€876 |
| 2025 | €12,096 | +€312 |
Why does it increase? To compensate for inflation and cold progression.
Who benefits from the basic allowance?
Everyone! The basic allowance is automatically considered for all taxpayers: - Employees - Self-employed - Pensioners - Students with income - Part-time workers
Basic allowance for married couples
Married couples who file jointly receive double the basic allowance: €24,192 (2025).
Example: - Partner A: €40,000 income - Partner B: €20,000 income - Joint income: €60,000 - Minus basic allowance: -€24,192 - Taxable income: €35,808
Do I need to apply for the basic allowance?
No! The basic allowance is automatically considered: - Employees: Your employer considers it in payroll - Self-employed: Automatically calculated in tax return - Pensioners: Considered in pension taxation
Basic allowance vs. subsistence level
The basic allowance protects the constitutional subsistence level. The Federal Constitutional Court regularly reviews whether it's sufficient.
Calculate now: To Tax Calculator