Skip to content

Important changes for employees in Germany coming in January 2024

In January 2024, things are shaking up with new rules and money moves. Get ready for some extra cash as a bunch of changes roll in. From a higher minimum wage to more Citizens Allowance and tweaks to taxes. Here are important changes in Germany taking effect in January 2024.

Increased Basic Tax Allowance and Child Tax Allowance

The basic tax allowance, which represents the amount of money you can earn without paying taxes, will increase. Originally planned at 11,604 euros, Finance Minister Christian Lindner mentioned a bump to 11,784 euros. The allowance for kids is also getting a boost to 6,612 euros. If you make more than the basic allowance, you’ll owe income tax. But starting January, the tax rate will rise more slowly than last year because it considers the inflation rate. In a nutshell, the tax changes in 2024 translate to higher take-home pay for employees.
Read also: Important changes for drivers in Germany in 2024

The minimum wage will go up from 12 to 12.41 euros per hour
The minimum wage is going up from 12 to 12.41 euros per hour

Minimum wage, minijob, Income for Citizens: more money

The minimum wage is going up from 12 to 12.41 euros per hour. With this increase, the maximum earnings for mini-jobs, known as minijobs, will also go up, rising from 520 to 538 euros per month starting in January.

From January 1, 2024, more than five million people receiving Income for Citizens will see a roughly twelve percent bump in their payments. For singles, this means an increase from 61 to 563 euros per month, while cohabiting adults get 506 euros. Rates for children, based on age, will range from 357 to 471 euros. Furthermore, first-year trainees will experience a 4.7 percent hike in their minimum salary, reaching 649 euros per month.

The warning law and price of CO2

Starting in January, the initial provisions of the Heating Law come into effect. In new development areas, new buildings will permit only heating systems that utilize at least 65% renewable energy. This often translates to the use of heat pumps. As of January 1, the increase in the CO2 price to €40 per tonne will result in higher costs for fuelling and heating with oil or gas.
Read also: January 2024 Kindergeld and Kinderzuschlag payment dates

Individuals requiring care while still residing at home qualify for Carer's Allowance
Individuals requiring care while still residing at home can qualify for Carer’s Allowance

Changes in Germany in January 2023

Retirement age: As the year concludes, the standard retirement age climbs to 66, impacting pensioners born in 1958. For those born in subsequent years, the retirement age increases in two-month increments. This implies that individuals born later will need to work for a longer period or accept reductions if they choose to retire before reaching the new retirement age.

Electronic prescription: Starting January, contracted doctors will be mandated to issue electronic prescriptions for prescribed medications. Insured individuals will have three options for redeeming their prescriptions: through a dedicated app, by printing a hard copy on paper, or by using their health insurance card.

Tax on restaurant visits: Beginning January 1, the standard VAT rate for the catering industry reverts to 19 percent from the temporary 7 percent. This means that dining out may become more expensive due to the higher VAT rate.

Deposit for milk in plastic bottles: Starting January 1, a deposit will be imposed on milk or mixed milk drinks sold in plastic bottles. Nevertheless, this new deposit rule has already faced criticism.
Read also: How African refugees can obtain German citizenship after 6 years

Passports for children no longer requested from January 2024: The current document for children under twelve is set to be replaced by an electronic passport with an extended validity period and the capability for global use. This change will result in increased expenses for parents, as the e-passport is priced at 37.50 euros, making it 13 euros more expensive than the previous child passport.

Carer’s allowance: Individuals requiring care while still residing at home can qualify for Carer’s Allowance, with the amount varying based on the level of care, currently ranging from €316 to €901 per month. Recipients have the flexibility to use this financial support, for instance, to cover the costs of their care. In 2024, there will be a 5% increase in the allowance. Additionally, there’s an added benefit when aged care funds subsidize the personal contribution for individuals in nursing homes. Depending on the duration of care in the facility, there are escalating aid surcharges: 5% reduction in own contribution in the first year, increasing to 15% in 2024; from 25% to 30% in the second year; from 45% to 50% in the third year; and from 70% to 75% in the fourth year.