Basic allowance

The basic allowance is the portion of income that remains tax-free in Germany. It ensures that the minimum subsistence level – the amount of money needed to cover essential living costs – is not subject to taxation.

In 2025, the basic allowance amounts to €12,096 for single persons and €24,192 for married couples or registered partners. Income above this threshold is subject to taxation. The allowance is automatically taken into account in the tax assessment. All taxpayers are entitled to it, regardless of whether they are employees, self-employed, retirees, students, or trainees.

The basic allowance is regularly adjusted to the minimum subsistence level, with inflation also being taken into consideration. In addition, there are other allowances such as the child allowance and the saver’s allowance, which applies specifically to investment income such as interest, dividends, or capital gains from shares and funds.

(As of 2025)