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Changes in 2025 summarized

Health

• ​Private and public health insurance will get expensive in 2025. Public insurance will get more expensive than private for high earners.
• From January 2025, electronic patient records (ePA) will be gradually introduced for everyone. ePA is a digital folder for your health-related data.
• Long-term nursing care insurance premiums will increase by 0.2% in 2025. At the same time, nursing care benefits will increase by 4.5%.

Insurance

• The amount you can contribute to the company pension plan tax-free will increase to 644€ in 2025.
• ​Car insurance will become 26% more expensive on average in 2025.
• ​Legal insurance plans from Arag*, KS-Auxilia*, and WGV are still the best in 2025.
• ​Dental insurance plans from Deutsche Familienversicherung AG* and Allianz are the best in 2025. Barmenia and Feather reduced their services and hence couldn't make it to the top.
• The personal liability insurance plan from Die Haftpflichtkasse (Einfach Komplett) is rated the best by all rating agencies and experts in 2025. You can get personal liability insurance via comparison portals like Check24* and Verivox*.

Utility & petrol costs

• The CO2 price will rise from €45 per ton to €55 per ton in 2025. This will make petrol 2.8 ct/l more expensive and diesel 3.2 ct/l more expensive.
• Gas prices will increase in 2025 due to higher network fees and an increase in CO2 prices.

Social Security and tax

• ​Social security contributions will rise in 2025. Thus, leading to lower net income. More on it later in the newsletter.
• The increase in social security contribution is slightly compensated by an increase in the basic tax allowance. The basic tax allowance will increase to 12,096€ in 2025. It was 11,784€ in 2024. The tax office deducts the basic tax allowance from your income before calculating your income tax.
• You'll pay advance tax on your ETFs or investment funds. Your bank or broker will deduct the advance tax automatically. So, ensure your brokerage account has enough cash.
• The deadline to file an income tax return for 2024 is 31 July 2025. If you hire a tax advisor, the deadline extends to 30 April 2026.

Banking and investment

• We find C24* the best bank to offer free checking accounts. However, it offers apps and services only in German.
• Start investing in ETFs that track broad market indices. In Germany, you pay capital gains tax on 70% of the profits from equity ETFs. 30% of the profit from equity ETFs remains tax-free. You can open a free depot account with Scalable Capital* and Finanzen.net Zero*.
• Earn interest on your cash. Consorsbank* offers the highest savings interest rate of 3.55% on daily bank accounts (Tagesgeldkonto).
• We find FYRST* the best bank to offer free business accounts.

Politics

• Prepare for an election in February 2025. Five Bürgerämter (citizens’ services offices) in Berlin will be closed to prepare for February’s national elections.
• Fireworks may only be legally used from 6 pm Dec. 31 until 7 am Jan. 1.
• There will be a shortage of 26000 primary school teachers in 2025.

German visas and skilled workers

• You can apply for a skilled workers visa online from 1 Jan 2025.
• Hopefully, one can apply for a student and family reunification visa online in 2025.
• Every year, the German economy is short 400,000 skilled workers.

Impact on your net salary due to increased social security contributions

Prepare for receiving a lower net salary in 2025. Suppose you earned and are earning 8000 € gross per month in 2024 and 2025. The table below shows the impact on your net income in 2025.

If you are an employee, your employer will contribute around 50% to your social security contributions. This means you’ll get 89.4 € (178.8/2) less every month in 2025. It amounts to 1072.8 € of lost income in 2025.

You can read the complete guide here.

Community Shoutouts!

Thanks for sharing your feedback on our different products and guides. We have updated them based on your suggestions.

• Guide on "Capital gains tax" - Updated the guide to clarify the following topics: "Advanced tax", "Tax on ETFs", and "Tax on futures and options."
• ​Citizenship test questions - Corrected the name of the current German chancellor and current head of state. We will also provide a PDF containing all the questions and answers for people joining the free citizenship test course.

Thanks again for your constructive feedback. We look forward to your suggestions and strive to improve continuously.

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