Germany · 2027 changes
Germany 2027: tax and money changes for employees and expats
Several money rules change in Germany on 1 January 2027. Most are small increases that offset inflation, but a few matter for expats: a new state-supported pension savings account, a higher minimum wage, and the end of the extra sick-child days. Some measures are still in draft form, as noted below.
Income tax (draft law)
- Tax-free allowance: €12,564, up from €12,348.
- Tax brackets shift up to offset inflation; the 42% rate is planned to start at about €70,600 of taxable income.
- Employee work allowance (Arbeitnehmer-Pauschbetrag): up by €200.
- The cabinet approved the draft in September 2026; parliament still has to pass it, and figures may move slightly.
See the current tariff in our guide to German income tax brackets.
Families
- Child benefit (Kindergeld): €267 per child per month, up from €259 (draft).
- Child allowance (Kinderfreibetrag): €10,056 per child, up from €9,756 (draft).
- Sick-child days fall back from 15 to 10 per child per parent (30 to 20 for single parents) unless the temporary rule is extended. See our guide on what to do when schools close.
- Early start pension: the state plans to pay €10 a month for each child aged 6 to 18 into a pension savings account; the Bundestag approved it in October 2026.
Pensions and savings
- New pension savings account (Altersvorsorgedepot): from 1 January 2027 you can invest in a state-supported account. The state adds 50% on the first €360 a year and 25% on contributions up to €1,800, so up to €540 a year, plus a children’s bonus. It is approved by both chambers of parliament.
- Check how a German pension account would be treated if you later move to another country.
Work and pay
- Minimum wage: €14.60 an hour from 1 January 2027, up from €13.90.
- Mini-jobs: the flat tax on mini-jobs is planned to rise from 2% to 5%.
- Sunday and holiday surcharges: more of them become tax- and contribution-free (draft).
What to do now
- Check your payslip in January 2027: tax should fall slightly.
- If you have children, confirm your Kindergeld is paid; you can apply even as a newcomer from abroad.
- Look at the new pension savings account if you expect to stay in Germany for years.
Calculate your German net salary →
Sources
This guide is general information based on the tax rules we could verify for 2026, not tax or financial advice. Rules change and personal situations differ, so check with the tax authority or a qualified adviser before you act. Spotted a mistake? Email [email protected].