Good to know
- Almost every year, the basic tax-free allowance is rising
What is a Basic Tax-Free Allowance (Grundfreibetrag)?
The basic tax-free allowance (Grundfreibetrag) is an income amount that can’t be taxable. This is an amount that is enough for essential life. So, only income higher than the basic tax-free allowance is subject to income tax.
Every taxpayer is entitled to this annual basic tax-free allowance.
Every two years, the German federal government must determine the amount of basic tax-free allowance.
Basic Tax-Free Allowances for 2023, 2022 & Previous Years
Income tax is calculated for each assessment period according to the rules described in Section 32a of the Income Tax Tariff – Income Tax Act (EStG).
The basic tax-free allowance stated in the table below is adjusted annually and applies per capita. The basic tax-free allowance for couples is twice as high as for single people.
| Tax Year | Single | Couples * |
|---|---|---|
| 2023 | 10.908 € | 21.816 € |
| 2022 | 10.347 € | 20.694 € |
| 2021 | 9.744 € | 19.488 € |
| 2020 | 9.408 € | 18.816 € |
| 2019 | 9.168 € | 18.336 € |
The Children’s Tax-Free Allowance and Single Parents
In addition to the basic tax-free allowance (Grundfreibetrag), each child is taken into account either through child benefit (Kindergeld) or the children’s tax-free allowance (Kinderfreibetrag). In the current year, parents will initially receive child benefits (Kindergeld). When submitting a tax return, the tax office automatically carries out a favorable check. They determine whether the tax advantage resulting from the children’s tax-free allowance is higher than the child benefit paid out. If the tax advantage is lower, the child benefit remains. Single parents receive an additional relief amount of children’s tax-free allowance.
Must-Read Info
If you are interested, you can learn more about tax classes (Steuerklassen) in Germany.
