Wage Changes in Germany. Work in Germany. More or less money in the New Year? With the 2025 tax reform, many employees in Germany will see changes in their pay. While there’s talk of “more take-home pay,” this won’t be true for everyone. Some may even end up with less money each month. A table shows who will benefit from the tax reform. The federal government has stated that it aims to ease the burden on citizens in the coming years by adjusting tax rates. Here’s a look at which employees will get more money from 2025.
Germany’s Tax Reform: Which Employees Will Take Home More Money in 2025?
Many employees who rely on every cent of their paycheck worry that the 2025 tax reform might make things harder for them. However, there’s some good news: there’s no need to worry. According to early estimates from the “Bild” newspaper, the lower and middle-income groups, in particular, are expected to benefit from the tax changes in 2025.
| Gross wages | Extra money from 2025 |
| 2,000 euros | +59 euros |
| 2,500 euros | +54 euros |
| 3,000 euros | +55 euros |
| 3,500 euros | +55 euros |
| 5,000 euros | +76 euros |
| 5,500 euros | +175 euros |
| 7,500 euros | +214 euros |
Tax Reform 2025: What Changes Are Coming for Employees?
However, for employees earning more than 8,500 euros a month, net income is expected to decrease rather than improve starting in 2025. Around 159 euros will be deducted from their take-home pay.
Read also: Essential Steps to Take Immediately After Being Laid Off
For those with varying incomes throughout the year, the basic tax-free allowance could be significant. This allowance will increase retroactively by 180 euros for 2024, raising it to 11,784 euros, according to “Finanztip.” In 2025, it will rise by another 300 euros to 12,084 euros. By 2026, it will increase by 252 euros, reaching 12,336 euros.