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 Grundfreibetrag 2025
The Grundfreibetrag (basic tax-free allowance) ensures that the subsistence minimum remains tax-free. For the 2025 tax year, the following applies:
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For single persons: 11.784 Euro
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For married couples (joint assessment): 23.568 Euro
If your taxable income is below this threshold, you do not have to pay income tax.
3. Other important tax-free allowances 2025
In addition to the basic tax-free allowance, there are other allowances that can reduce your tax burden:
Kinderfreibetrag (Child allowance):
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Per parent: 3.192 Euro
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For both parents combined: 6.384 Euro
The Kinderfreibetrag partially replaces child benefit (Kindergeld) for higher incomes.
Alleinerziehendenentlastungsbetrag (Relief amount for single parents):
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Base amount: 4.260 Euro
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For each additional child: extra 240 Euro
Sparerpauschbetrag (Savers' allowance):
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For investment income such as interest or dividends
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1.000 Euro for single persons, 2.000 Euro for married couples
Werbungskostenpauschale (Employee expenses lump sum):
- 1.230 Euro (automatically deducted for employees)
4. Calculation examples for context
Example 1: Single with no children
Annual income: 15.000 Euro
– Basic tax-free allowance: 11.784 Euro
= Taxable income: 3.216 Euro → Low tax burden
Example 2: Married, 2 children, one income
Annual income: 40.000 Euro
– Basic tax-free allowance (joint): 23.568 Euro
– Child allowance: 6.384 Euro
= Taxable income: 10.048 Euro → Significantly reduced tax
Example 3: Single parent with 1 child, part-time job
Annual income: 20.000 Euro
– Basic tax-free allowance: 11.784 Euro
– Child allowance: 3.192 Euro
– Relief amount: 4.260 Euro
= Taxable income: 764 Euro → Little to no tax
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 Nr. 11 StBerG (Tax Consultancy Act).