Breaking Down Pension Taxes for New Retirees in Germany
By Nadine Oberhuber
A quick read (approx. 2 mins)
What's the tax-free pension amount I'm entitled to receive? - Question rephrased: Inquiring about the pension amount exempt from taxation obligations.
Let's delve into the world of retirement pensions in Germany and figure out how much you can receive tax-free.
The Magic Number - Tax-Free Pension for New Retirees in 2024
See what's in store for 2024 retirees: They could draw a gross annual tax-free pension of 16,243 euros, that's for singles. For couples, the amount doubles. But how about earlier retirees who hung up their boots in 2005? They could enjoy a staggering 19,758 euros without tax. Yes, you read that correctly — tax-free! Why the difference? Thanks to the gradual pension taxation adjustment starting in 2005, late retirees benefit from a higher tax-free threshold due to its gradual decrease since then.
When to File a Tax Return
The government's intention behind this system is to promote fairness in retirement savings and encourage youngsters to save privately. But there's a catch: If your pension income for the past year (for example, 2024) exceeded 11,604 euros, regardless of your retirement year, brace yourself to file a tax return. In 2025, the threshold increases to 12,084 euros. However, if you have additional deductions such as advertising costs, special expenses, or extraordinary burdens, your total income can exceed the tax-free threshold and escapes tax. But remember, the tax office has to make a case-by-case determination.
Taxable Pension Portion
Curious to understand the calculation behind these figures? Let's dive in. In 2024, new retirees could receive a maximum tax-free pension of 16,243 euros annually, translating to 1,323 euros per month. 83 percent of this pension would be subject to taxation, leaving only 13,481 euros of the total untouched by taxes. Moreover, retirees can claim a variety of deductions such as advertising cost allowance, special expense allowance, and retirement provisions, bringing the take-home amount near the taxable threshold of 11,604 euros for 2024.
A Tax-Free Boost for Long-Term Retirees
Retirees who retired prior to 2005 can still enjoy 50 percent tax-free pension income, allowing them to receive a higher maximum pension of 19,758 euros. This maximum corresponds to 1,610 euros per month that can remain untaxed.
- Tax
- Pension Taxation
- New Retirees
- BMF
Fun Fact
Did you know? As of 2025, the basic tax-free allowance for singles and couples is €12,096 and €24,192, respectively — for all individuals in Germany, including retirees[2].
Sources
- taken from blaetter-ohr.de
- information sourced from finnhub.de
- data from bundesregierung.de
- insights from br-wissen.de
- The tax-free pension for new retirees in 2024 will be 16,243 euros, while for earlier retirees who retired in 2005, it was 19,758 euros due to the gradual pension taxation adjustment starting in 2005.
- If a retiree's pension income exceeds 11,604 euros, regardless of their retirement year, they will be required to file a tax return.
- In 2024, new retirees can receive a maximum tax-free pension of 16,243 euros annually, with 83% of the pension being subject to taxation.
- Retirees who retired prior to 2005 can still enjoy 50% of their pension as tax-free income, allowing them to receive a higher maximum pension of 19,758 euros.
