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Changes in the tax laws to reward more work

Germany is facing the challenge of not having enough people to keep the country running and growing. To fight this problem, the German government is making changes not only in immigration law but also in tax law.

Here are some of the best changes in the tax laws.

• No tax on overtime payments: Work overtime tax-free
• Get your employer's pension plan contribution paid out in your salary. If you extend your retirement and stop contributing to your statutory pension plan, your employer will still pay its pension plan contribution. The only difference is that the employer will pay you instead of the pension fund.
• Pension deferral bonus: Waive your statutory pension and delay retirement for a big fat deferral bonus. The bonus includes all the monthly pensions you have forgone and the pension plan's health insurance contributions. Suppose you delayed your retirement by one year. You'll get all the pension payments you would have received that year in one fell swoop. And don't forget the salary you get when you are working.

No 3/5 tax class from 2030

The German government is abolishing the 3/5 tax class. Working couples will automatically be placed in tax class 4 with a factor.

How does that impact you?

You'll recieve less net family income every month. However, the total tax you pay in tax class 3/5 and tax class 4 with a factor will remain the same.

You may wonder how that is possible.

In tax class 3/5, you get more net family income every month. However, you usually owe the tax office some tax.

On the other hand, in tax class 4 with a factor, you get less net family income every month. However, you don't owe or owe very little tax to the tax office.

The principle is simple: your net annual income in both tax class combinations should remain the same.

How does it benefit the tax office?

The tax office gets money earlier and can use it to invest early.

49€ ticket stays till the end of 2024

The Germany-wide ticket will cost 49 € in 2024. The price of this ticket might change in 2025. However, it's not yet decided

29 € Berlin ticket is back

Berliners can now travel even cheaper with a 29 € monthly ticket. It's valid only in the AB zone. You can also transfer your Deutshland Ticket to your Berliner Ticket.

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