Germany Tax Changes 2027: What the Reform Bill Means for Your Pay
A higher basic allowance and employee lump sum, a new 47% top rate and higher social contribution ceilings. The income tax figures come from the government bill and remain a draft until the Bundestag and Bundesrat vote.
Headline change
Grundfreibetrag 2027, government bill (draft)
Germany 2026 vs 2027: key parameters
| Parameter | 2026 | 2027 | Status |
|---|---|---|---|
| Grundfreibetrag (basic allowance) | €12,348 | €12,564 | Draft |
| 42% rate starts at | €69,879 | €70,601 | Draft |
| 45% rate starts at | €277,826 | €250,000 | Draft |
| 47% rate starts at | No such rate | €280,000 | Draft |
| Arbeitnehmer-Pauschbetrag | €1,230 | €1,430 | Draft |
| Kindergeld per child per month | €259 | €267 | Draft |
| Child allowances per child (Kinderfreibetrag + BEA) | €9,756 | €10,056 | Draft |
| Minimum wage per hour | €13.90 | €14.60 | Adopted |
| Minijob limit per month | €603 | €633 | Adopted (tied to minimum wage) |
| Contribution ceiling: pension, unemployment | €101,400 | €106,200 | Draft (cabinet, Bundesrat pending) |
| Contribution ceiling: health, care | €69,750 | €76,500 | Draft (cabinet, Bundesrat pending) |
| Compulsory health insurance threshold (JAEG) | €77,400 | €84,150 | Draft (cabinet, Bundesrat pending) |
| Care surcharge for childless employees | 0.6 points (employee 2.4%) | 0.9 points (employee 2.7%) | Draft (cabinet bill) |
| Average health Zusatzbeitrag (add-on rate) | 2.9% | Not published | Pending (by 1 November) |
Tax thresholds refer to taxable income, not gross salary. Contribution ceilings and the JAEG come from the cabinet's SV-Rechengrößenverordnung 2027 (7 October 2026), the care surcharge from the Pflegeneuordnungsgesetz (cabinet, 30 September 2026).
Take-home pay: 2026 vs 2027 (estimate)
| Gross salary / year | Net 2026 | Net 2027 (estimate) | Difference |
|---|---|---|---|
| €30,000 | €21,227 | €21,253 | +€26 |
| €50,000 | €32,337 | €32,347 | +€10 |
| €70,000 | €42,583 | €42,577 | −€6 |
| €80,000 | €48,049 | €47,616 | −€433 |
| €100,000 | €58,030 | €57,714 | −€316 |
TaxRavens estimate: tax class I, no children, no church tax, same gross in both years. 2026 matches our calculator. 2027 uses the draft tariff, Pauschbetrag, ceilings and care surcharge; the Zusatzbeitrag stays at 2.9% and the pension rate at 18.6% until the 2027 values are set. The loss peaks around €76,500 (about €450 a year), where the new health and care ceiling applies in full.
Employees
A small tax cut, mostly offset by contributions
Income tax falls at every salary level thanks to the higher allowance, the flatter middle zone and €200 more Pauschbetrag. But the care surcharge for people without children rises by 0.3 points, and the health and care ceiling jumps 9.7% to €76,500, partly because a July 2026 law adds a one-off €300 a month on top of normal indexation.
Parents gain more: no care surcharge, and €8 a month more Kindergeld per child (draft). At €50,000 with one child, take-home pay rises by about €113 a year by our estimate.
The average Zusatzbeitrag for 2027 comes out by 1 November. Each 0.1-point rise costs an employee 0.05% of gross pay up to €76,500, about €25 a year at €50,000.
High earners pay more: 45% from €250,000 of taxable income instead of €277,826, and 47% from €280,000.
Minijobs: the employer's flat tax rises from 2% to 5% (draft) and can be passed on to the employee.
Also in the draft: the tax credit for tradesmen's services (Handwerkerleistungen) falls from 20% (max €1,200) to 15% (max €900).
Freelancers and the self-employed
Same tariff, higher health insurance cap
The new tariff also applies to the annual income tax return: slightly less tax up to roughly €70,000 of taxable income, more above €250,000. If you are voluntarily insured in statutory health insurance (GKV), contributions are charged on income up to €76,500 instead of €69,750, so the maximum health and care contribution rises by about 9.7%, plus the higher care surcharge if you have no children.
Expats and relocants
No special regime, but thresholds move
Germany has no expat tax regime, so the general changes apply. The higher Kindergeld and child allowances apply to residents.
EU Blue Card: the salary thresholds are linked to the pension contribution ceiling, which rises to €106,200 (draft), so they will rise too. BMI and BAMF publish the official 2027 figures in December or January; check them before you apply.
Private health insurance is open to employees only above the JAEG (compulsory insurance threshold), which rises from €77,400 to €84,150 (draft).
What is still pending
FAQ
Will my net salary in Germany rise in 2027?
Barely, if you have no children. On the draft figures a single employee in tax class I keeps about €10 more a year at €50,000 but loses about €316 at €100,000, because higher health and care contributions outweigh the tax cut. Parents gain more. This assumes the Zusatzbeitrag stays at 2.9%.
When will Germany's 2027 tax figures be final?
The final Bundestag readings and the Bundesrat vote on the Einkommensteuerreformgesetz 2027 are expected in November–December 2026. The contribution ceilings need Bundesrat consent in November.
Who pays the new 47% tax rate?
Under the draft, 47% applies to taxable income above €280,000 a year, and 45% starts earlier, at €250,000 instead of €277,826. Most employees are not affected.
What is already final for 2027?
The €14.60 hourly minimum wage and the €633 Minijob limit tied to it. The income tax figures, contribution ceilings and care surcharge are still drafts.
