Social insurance: Significant increase in contribution assessment ceilings. This is the maximum income considered to calculate your insurance premium. Higher earners will feel the effect.
Health and long‑term care: €66,150 to €69,750
Pension and unemployment insurance: €8,050 to €8,450 per month
Annual income threshold for switching to private health insurance rises to 77,400€ (6,450€ per month).
Military
Military service: From July 2027, a medical assessment of all young men born in 2008. A questionnaire for women to be completed voluntarily. The aim is to expand the armed forces and reserves. More here ->
Bundeswehr to expand active soldiers by 80,000 to 260,000 and increase the number of reservists to 200,000. Voluntary service of at least six months with planned pay of 2,600€ gross per month. More here ->
Salary and Pension
Minimum wage will increase from 12.82 euros to 13.90 euros per hour from 1 Jan 2026. More here ->
Minijob limit will increase from 556€ to 603€ per month.
Active pension: From January 2026, people working beyond their retirement age will receive the first €2,000 of their monthly salary tax-free. You also get relief from social security contributions. More here ->
Commuter allowance: You get a uniform 38 cents per kilometre for travel between your home and work, regardless of the means of transport.
Tax‑free trainer allowanceincreases from 3,000€ to 3,300€ per year.
General volunteer allowanceincreases to 960€ per year.
VAT on food in restaurants falls from 19% to 7%, while VAT on drinks remains at 19%.
Energy
The gas price will reduce by approximately. 0.344 cents per kWh. The gas price consists of three components: network charges, the energy tax, and the gas storage surcharge. Gas storage surcharge is abolished. Hence, reducing the gas price.
From 2026, CO2 certificate auctions will begin. Companies purchase CO2 certificates to offset their CO2 emissions. Earlier, these certificates were sold at a fixed price of 55€ per tonne. From 2026, they will be auctioned with a price corridor of 55€ to 65€ per tonne.
Transport
The Deutschland ticket price will increase to 63€ per month.
The vehicle inspection ( HU) is now called the digital inspection report (DUB). Under DUB, you'll get the car inspection results online in German and English. You can access the report via the QR code, link, or the Federal Motor Transport Authority (KBA) website.
Vehicle registration certificate in the app. You can create an electronic vehicle registration certificate (Part I) and access it via the i-Kfz app. You no longer have to carry the paper version if you have the electronic version in the app.
The app reminds you of an upcoming vehicle inspection.
The app will also be available to fleet operators and companies.
You can share your digital vehicle registration document with repair shops.
You should also expect the feature to store your digital driving licence in the app. However, when this will happen is unclear.
Family
Child benefit will increase from 255€ to 259 euros per child.
Child tax allowance increases to 3,414€ per parent. You also receive an allowance of €1,464 per parent for childcare, education, or training expenses.
Child dental checkups: From 1 Jan 2026, dental examinations will also be included in the child's “yellow booklet”.
All‑day care: From August 2026, children in 1st grade will have a legal right to all-day care. Subsequent grades will be added gradually. From 2029/30, all children in grades 1 to 4 will be entitled to eight hours of care daily, five days a week.
Health
From July 31, 2026, labeling requirements will apply to 80 fragrance ingredients in cosmetic products. Earlier, it applied to 24 fragrance ingredients. According to the European Commission, between 1% and 9% of people in the EU experience contact allergies to allergenic fragrance ingredients.
PFAS in drinking water: PFAS pose a health risk to humans and animals. The government introduced a total limit value of 0.1 micrograms per litre for 20 PFAS substances. More here ->
Free lung cancer screening: From April 2026, heavy smokers can participate in lung cancer screening every 12 months. Statutory health insurance companies will cover the costs. Smokers aged 50 to 75 can avail of this service.
Honey labelling: Manufacturers must state all the countries from which they sourced the honey on the label. They must sort the countries by weight share. It'll improve transparency and reduce adulteration.
Jam: The minimum fruit content in jams will increase from 35% to 45%. Jams with a label "extra" must have a minimum fruit content of 50% (earlier it was 45%).
Cannabis may only be prescribed after a personal consultation with a doctor. Moreover, only a pharmacy can issue cannabis to the patient.
Enviornment
E‑cigarette recycling: From Jan 2026, you can give your old e-cigarette to any outlet that sells them. It doesn't matter if you purchased the e-cigarette elsewhere or if you don't buy a new one when returning it.
USB‑C obligation: From 28 April 2026 all new laptops with charging power up to 100 watts must be equipped with a USB‑C charging port. This will help in reducing the number of chargers in your home.
Other
Fewer bridge holidays in 2026. Most nationwide public holidays will fall on Saturday in 2026.
Bulgaria will adopt the euro on 1 January 2026, becoming the 21st member of the euro area.
You can deduct all your work-related expenses from taxes. The work-related expenses include business travel, the home office allowance, books, work equipment, etc.
Suppose you don't have any work-related expenses. You still get an allowance of €1,230 as of 2025. The tax office automatically deducts this amount.
However, if your work-related expenses are more than €1,230, you can deduct all of them to reduce your tax burden.
If your expenses are just below €1,230, consider purchasing work-related items in December to take advantage of the tax benefit.
NOTE: The payment date is what counts for tax purposes.
Example: Suppose you wish to enroll in a course that starts in 2026. You can still pay for the course now to reduce your 2025 tax.
2. Medical expenses
You can deduct medical costs like dental work, glasses, psychotherapy, or physiotherapy from your taxes as extraordinary expenses. They are only tax-deductible if you exceed your reasonable burden.
You should bundle your medical expenses into one calendar year. This allows you to exceed your reasonable burden and recover part of your medical costs through tax deductions.
3. Craftsman costs and household-related services
For home improvement work, you can deduct 20% of the costs, up to €1,200. That means the maximum bill the tax office accepts here is €6,000. Only labor, travel, and equipment costs count. Material costs do not.
For household-related services, you can deduct up to 20% of the cost, up to €4,000 per year. The maximum total cost is €20,000. This includes services like cleaning help, childcare, or care for elderly or sick people in your home.
Check how much you have already paid in 2025 and what is planned for 2026.
4. Donations
Donation requests increase around Christmas. Donations also reduce your taxes.
You can deduct donations of up to 20% of your income. In most cases, a bank statement is enough as proof. This applies to donations and membership fees to non-profit organizations up to €300.
For higher amounts, you need a donation receipt. Donations to political parties and donations in kind are generally tax-deductible as well.
For disaster relief donations to special accounts, a bank statement is sufficient even for unlimited amounts.
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New here? Check out GermanPediaDid someone forward you this? Subscribe to this newsletter. Click here if you are a bot. We'll stop sending you emails. Important changes Public health insurance companies announced the premium increases on 23 Dec 2025. We have updated our guide and listed the premiums each public insurer will charge in 2026 here. You can also use our calculator to check your 2026 costs and the savings potential by switching to a more affordable provider. More on it later. We...
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