Increase in taxes for citizens: starting from 2025, individuals will be required to pay a higher amount in taxes
As the first of January, 2025, approaches, there are strong indications that taxpayers in Germany may face an increase in their nursing care insurance contributions. The German government has not yet confirmed these changes, but discussions within the federal government and reports from reliable sources such as "Table.Briefings" and "Politico" suggest that an increase may be necessary due to financial pressures on the long-term care insurance system.
Health Minister Nina Warken indicated that to maintain stable contribution rates for the Social Long-Term Care Insurance, additional short-term budget support might be required. Without it, an increase in contributions could be expected in January 2025. The federal-state commission on long-term care reform is actively working to safeguard the financial sustainability of care insurance in response to demographic challenges and multibillion-euro deficits.
Currently, the nursing care insurance contribution rate is 3.6% of income for most, rising to 4.2% for childless individuals aged 23 and above. This rate is split evenly between employer and employee (1.7% each). An increase in contributions would translate into higher payroll deductions for employees and higher employer-paid contributions, thereby financially impacting taxpayers.
Additionally, the additional health insurance contribution (Zusatzbeitrag) on health insurance is set to increase from 1.7% to 2.5% in 2025, further increasing insurance costs.
The exact increase in nursing care insurance contributions and the overall financial impact depend on government decisions and any accompanying budget support measures. The consumer portal Finanztip also reported these potential changes, suggesting that the nursing care insurance contribution could be adjusted by 0.15 percentage points, potentially rising to 3.55 percent or 4.15 percent.
The nursing care insurance is under immense pressure due to inflation and other factors, leading to expected deficits in the coming years. The Federal Republic of Germany is facing a near-chronic shortage of money for social security funds and the budget. As such, the state may require more money from taxpayers starting January 1, 2025.
While the increase is not yet finalized, taxpayers are advised to stay informed about potential changes to their nursing care insurance contributions. It is also worth noting that taxpayers may be able to save in some areas, particularly with taxes. An interesting tax tip for potential savings in 2025 is related to moving costs. There is a possible tax trick for moving costs that could be useful to know.
In conclusion, while the increase is not yet confirmed, financial pressures and government statements suggest that higher nursing care insurance contributions may take effect in January 2025, potentially increasing the share of health-related social security contributions borne by taxpayers and employees. It is essential for taxpayers to stay informed about these potential changes and consider ways to save on taxes where possible.
- The upcoming change in nursing care insurance contributions, as suggested by Health Minister Nina Warken and discussions within the federal government, could lead to higher payroll deductions for employees and increased employer-paid contributions, financially impacting taxpayers.
- Moreover, with the potential increase in nursing care insurance contributions and the additional health insurance contribution (Zusatzbeitrag) on health insurance set to rise in 2025, taxpayers should stay informed about potential changes and consider ways to save on taxes where possible, such as taking advantage of possible tax tricks for moving costs.
