Anyone who earns money in Germany is generally required to pay income tax. However: not all of your income is taxed. The state takes so-called "Freibeträge" (tax-free allowances) into account – these are fixed sums that are deducted from your income and thus remain tax-free. The most important among them: the basic tax-free allowance (Grundfreibetrag).
In this article, you will learn:
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What exactly a tax-free allowance is
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Which allowances are available in 2025
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The amount of the Grundfreibetrag 2025
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Which calculation examples apply to single people, married couples, and families
1. What is a tax-free allowance?
A tax-free allowance is the portion of your income on which no income tax is due. Only the amount exceeding this limit is taxed – and even then, according to a graduated tax rate.
2. The basic tax-free allowance 2025 and 2026
The basic allowance (Grundfreibetrag) keeps the subsistence minimum tax-free. The adopted amounts are:
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2025: €12,096 for single persons, €24,192 for joint assessment
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2026: €12,348 for single persons, €24,696 for joint assessment
Important: the basic allowance is not deducted from income. It is built into the income tax scale as a "zero-rate zone". If taxable income does not exceed it, no income tax is due. Only the part above it is taxed, starting at 14 percent.
3. Other important allowances
Child allowance (per child):
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2025: €3,336 per parent, €6,672 together
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2026: €3,414 per parent, €6,828 together
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Plus the allowance for care, upbringing or education of €1,464 per parent (€2,928 together).
Child allowance and child benefit are not granted side by side. The tax office automatically checks which is more favourable (Günstigerprüfung). Only if the tax saving from the allowances exceeds the child benefit are they deducted, and the child benefit is added back to the tax. For most families the child benefit remains (2025: €255, 2026: €259 per month per child).
Relief amount for single parents:
- €4,260 for the first child, €240 for each additional child
Saver's lump sum:
- €1,000 for single persons, €2,000 for joint assessment
Employee lump sum (income-related expenses):
- €1,230, applied automatically unless higher expenses are proven
4. Example calculations (tax year 2025)
The examples show in simplified form how taxable income arises. The basic allowance is not deducted but applied within the tax scale. Other deductions such as social security contributions are assumed to be already included.
Example 1: Single, no children
Income after expenses and pension contributions: €15,000
= Taxable income: €15,000
€12,096 of it stays tax-free through the zero-rate zone. Only the part above (€2,904) is taxed, starting at 14 percent.
Example 2: Married, two children, joint assessment
Taxable income before child allowances: €40,000
The zero-rate zone here is €24,192. The family receives child benefit for the children. At this income, child benefit is usually more favourable than the child allowances, so they are not deducted.
Example 3: Single parent with one child
Income: €20,000
– Relief amount for single parents: €4,260
= Taxable income: €15,740
€12,096 of it stays tax-free through the zero-rate zone. Child benefit is paid for the child; at this income the Günstigerprüfung usually does not result in a deduction of the child allowances.
5. Conclusion: Use tax-free allowances consciously
Many people pay more tax than necessary – because they do not know which allowances they are entitled to. Especially with children, for low incomes, or in special life situations, it is worth taking a closer look. The basic tax-free allowance forms the basis, but it is only one part of the overall picture.
Check every year what you are entitled to – and use allowances specifically to lower your tax burden.
**Note
**This article is for general information purposes and was carefully created by the editorial team at Lexo.Tax. Personal tax advice can only be provided within the framework of a membership with Lexo.Tax – and exclusively to the extent legally permitted under § 4 StBerG (Tax Consultancy Act).