Updated Tax Thresholds
From January 1, 2025, new income tax thresholds will apply in Germany. Key changes include:
- Basic Tax-Free Allowance : Increases from €11,604 in 2024 to €12,084 per year in 2025.
- Second Tax Bracket : Progressive tax rates of 14% to 24% apply up to €17,430 in 2025 (€17,005 in 2024).
- Next Tax Bracket : Rates between 24% and 42% apply up to €68,430 in 2025 (€66,760 in 2024).
- For taxable income up to €277,825 and above, thresholds remain unchanged.
Increased Contribution Assessment Ceiling
Starting January 1, 2025, the contribution assessment ceiling for statutory health and long-term care insurance will increase:
- 2025 : €66,150 annually (€5,512.50 monthly).
- 2024 : €62,100 annually (€5,175 monthly).
The ceiling marks the maximum gross income subject to contributions, with income exceeding this amount being contribution-free.
The insurance obligation threshold for opting into private health insurance also rises:
- 2025 : €73,800 annually (€6,150 monthly).
- 2024 : €69,300 annually (€5,775 monthly).
Minimum Wage Increase
The minimum wage will increase on January 1, 2025, from €12.41 to €12.81 per hour.
This change affects all employees, including part-time workers. For those on mini-jobs, the monthly earnings cap rises from €538 to €556 , equivalent to €6,672 annually .
Electricity Surcharge Hike
Electricity surcharges will increase by approximately 1.3 cents per kWh in 2025, totaling 3.15 cents per kWh .
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Impact on Households
:
- Families with an annual consumption of 3,000 kWh will pay about €40 more annually.
- Single-person households will face an increase of €20 per year .
This adjustment aims to distribute renewable energy grid expansion costs more fairly across the country.
Increased Housing Allowance
From January 1, 2025, housing allowance (Wohngeld) will increase by an average of €30 per month , reflecting rising costs of living and rent. This represents a 15% increase .
Planned Child Benefit Increase
The government plans to raise child benefits by €5 per child starting January 1, 2025, subject to parliamentary approval.
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New Rates
:
- One child: €255
- Two children: €510
- Three children: €765
The child allowance will also increase by €60 annually.
Mandatory USB-C Charging Ports
From 2025, the European Union will require all smartphones, tablets, and other small electronic devices to use a USB-C charging port.
This change is expected to reduce electronic waste, as approximately 11,000 tons of unused chargers are discarded annually in the EU.
These changes reflect Germany's efforts to adapt to economic, environmental, and societal shifts in 2025. Stay informed to ensure compliance and benefit from the new regulations.