Every person needs certain basic things to live. These include food, clothing, housing, and emergency medical care.
To ensure everyone can afford these basic things, the German government set a minimum subsistence level on which you don’t pay any tax.
The minimum subsistence level is also called a basic tax-free allowance (Grunfreibetrag in German).
In other words, anyone who earns money should be allowed to keep part of their salary without having to pay taxes on it. This part of the salary is the basic allowance.
As of 2024, the basic tax-free allowance (Grundfreibetrag) is 11,604 € per annum. For married couples, it is doubled to 23,208 € per annum.
How does basic allowance work?
The tax office deducts the basic tax-free allowance (Grundfreibetrag) and income-related expenses from your gross income. The amount left is the taxable income that the tax authorities use to calculate tax.
Example:
Suppose you earn 2000 € gross per month or 24,000 € gross per year. Your income-related expenses, such as travel costs, books costs, etc., are 1,500 € for the year.
The basic tax-free allowance (Grundfreibetrag) for 2024 is 11,604 €. The tax office will deduct 11,604 € and 1500 € from your gross income.
The amount left, 10,896 €, is the sum you pay taxes on. How much tax you pay depends on your tax class and tax bracket.
NOTE: You must file a tax-return to submit your income-related expenses. If you don’t file a tax return, the tax office won’t consider the income-related expenses and will deduct only the basic allowance.
You can hire a tax advisor (Steuerberator) or use online tools to file the income tax in Germany. We recommend SteuerGo*, Wundertax*, and Smartsteuer* for filing tax returns online.
Do basic tax-free allowance increases regularly?
Yes, the German government revises the basic tax-free amount every year. The increase depends on the rise in living costs.
The table below summarizes the basic tax-free allowance (Grundfreibetrag) in the past 10 years.
| Single | Married | |
|---|---|---|
| Basic allowance 2024 | 11,604 euros | 23,208 euros |
| Basic allowance 2023 | 10,908 euros | 21,816 euros |
| Basic allowance 2022 | 10,347 euros | 20,694 euros |
| Basic allowance 2021 | 9,744 euros | 19,488 euros |
| Basic allowance 2020 | 9,408 euros | 18,816 euros |
| Basic allowance 2019 | 9,168 euros | 18,336 euros |
| Basic allowance 2018 | 9,000 euros | 18,000 euros |
| Basic allowance 2017 | 8,820 euros | 17,640 euros |
| Basic allowance 2016 | 8,652 euros | 17,304 euros |
| Basic allowance 2015 | 8,472 euros | 16,944 euros |
| Basic allowance 2014 | 8,354 euros | 16,708 euros |
