Germany Income Tax Brackets 2026: Rates and Thresholds
Llandora·Updated 2026-10-14
⚠️ Disclaimer: For general information only — not tax, financial, legal, or medical advice. Figures may be outdated or incorrect; tax rules change frequently. Verify important decisions with the CRA/IRS or a qualified professional (for health topics, a licensed healthcare provider). You use this information at your own risk.
The short answer
In 2026 the first €12,348 of taxable income is tax-free (Grundfreibetrag, the basic tax-free allowance; €24,696 for jointly assessed couples). Income from €12,349 to €69,878 is taxed at a progressively rising rate from 14% to 42%, then a flat 42% applies up to €277,825, and 45% above that (Reichensteuer, the "rich tax"). Germany uses marginal rates: only the euros above each threshold are taxed at the higher rate — never your whole income.
The 2026 brackets (single filer, Grundtarif)
Taxable income
Marginal rate
€0 – €12,348
0%
€12,349 – €17,799
14% rising to about 24%
€17,800 – €69,878
about 24% rising to 42%
€69,879 – €277,825
42%
Above €277,826
45% (Reichensteuer)
There are no flat steps inside the progressive zone: the exact rate follows a statutory formula, so your rate climbs smoothly euro by euro. (For reference, the 2025 Grundfreibetrag was €12,096 — the 2026 figure is higher.)
Why your average rate is always lower than your top rate
Because only the slice of income above each threshold is taxed at the higher rate, your effective (average) tax rate always ends up well below your marginal rate. Someone with €60,000 of taxable income pays 0% on the first €12,348 and only reaches the 42% band on the top slice — the blended rate is far lower than 42%. This is the single most misunderstood point: moving into a higher bracket never reduces your take-home pay.
Couples: splitting doubles the thresholds
Joint assessment (Ehegattensplitting, income splitting for married couples and registered partners) effectively doubles every threshold: €24,696 tax-free, the 42% band runs from €139,758 to €555,650, and the 45% rate starts at €555,651. The mechanism treats the couple as two people each earning half the combined income, so couples with very unequal incomes pay noticeably less than two single filers would.
What sits on top of income tax
Church tax (Kirchensteuer). 8% of your income tax in Bavaria and Baden-Württemberg, 9% in all other states — but only if you are registered as a member of a church that collects it. Opting out requires officially leaving the church (Kirchenaustritt) at the registry office; it is a formal declaration, not just stopping attendance.
Solidarity surcharge (Solidaritätszuschlag). 5.5% of your income tax, but in 2026 it only kicks in when your annual income tax exceeds €20,350 (single) or €40,700 (joint assessment) — roughly 90% of taxpayers pay none of it at all.
Note that both are calculated on your income tax bill, not on your income — a 9% church tax does not mean 9% of your salary.
Frequently asked questions
Is Germany's top rate really 45%?
Only on taxable income above €277,826 (single) or €555,651 (joint) — and only that top slice is taxed at 45%. The vast majority of earners never touch the Reichensteuer.
What is the difference between marginal and average rate?
The marginal rate is what you pay on your next euro; the average rate is total tax divided by total income. Because of the 0% allowance and the gradual climb, the average is always lower — often dramatically so.
Do couples always benefit from splitting (Ehegattensplitting)?
Not always. The advantage is largest when one partner earns much more than the other; couples with similar incomes gain little or nothing. You can choose joint or separate assessment each year.
I moved to Germany mid-year. Do the full annual thresholds apply?
Generally, residents are assessed on the full year and the full thresholds apply — but confirm the details with your Finanzamt, as individual situations (e.g., mid-year arrival with foreign income) can differ.
What exactly counts as "taxable income" for the brackets?
Taxable income (zu versteuerndes Einkommen) is your gross income minus allowable deductions — work expenses, special expenses, and personal allowances. The brackets apply to what remains after deductions, not to your gross salary.
Does the Grundfreibetrag apply automatically?
Yes. It is built into the tax formula — every resident taxpayer gets it without applying, whether through payroll withholding or the annual return.
Sources
Bundesministerium der Finanzen (Federal Ministry of Finance): https://www.bundesfinanzministerium.de
Bundeszentralamt für Steuern (Federal Central Tax Office): https://www.bundeszentralamt-fuer-steuern.de
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