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Money and Tax Changes in Germany in 2024

Money and Tax Changes in Germany in 2024

In 2024, Germany is witnessing significant changes in various aspects of life, especially concerning income, taxes, and benefits. As the cost of living continues to rise, it’s crucial to stay informed about the upcoming modifications that may impact your financial well-being. Here’s a detailed overview of the key changes and what you need to know about Money and Tax Changes in Germany in 2024.

1. Income Tax and Child Allowance Changes:

    • Basic tax allowance increased to €11,604 (€23,208 for married couples) as of January 1st, 2024.
    • Child benefits (Kindergeld) set at €250 per month per child, continuing from the previous year.
    • Child tax exemption (Kinderfreibetrag) raised to €6,384 in 2024.
    • Adjustments to the solidarity surcharge with a €587 increase for remaining taxpayers.

2. Statutory Minimum Wage Increase:

    • Minimum wage rises from €12 to €12.41 per hour on January 1st, 2024, and further to €12.82 a year later.

3. Mini-Job Limit Increase:

    • Monthly earnings limit for mini-jobs increases to €538 from January 2024, with an annual limit of €6,456.

4. Bürgergeld Increase by 12 Percent:

    • Standard rates for long-term unemployment income and social assistance see an increase from January 2024.
    • Rates vary for single adults, adults living with a partner, and those with young dependents.

5. School Supply Benefits:

    • Personal school supplies support increases by around 12 percent, aiding children and young adults receiving Bürgergeld or related benefits.

6. Elterngeld Changes:

    • Parental allowance limit for couples adjusted to €200,000 and then €175,000 in two stages.
    • No change for parents with children born by March 31st, 2024.

7. VAT Increase in Cafes and Restaurants:

    • VAT in cafes and restaurants set to return to 19 percent from seven percent, impacting the cost of dining out.

8. Energy Price Brakes End:

    • Electricity and gas price caps expire at the end of 2023, potentially leading to increased energy bills.

9. Motor Vehicle Insurance Premiums Increase:

    • Anticipated rise of at least 10 percent in motor vehicle insurance premiums in 2024 due to increased repair costs.

10. Health Insurance Changes

Additional contributions for statutory health insurance allowed to rise by 0.1 percent, reaching the highest rate ever of 1.7 percent.  Income thresholds for health insurance and pensions adjusted for 2024.

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As you navigate through the changes in Germany’s financial landscape in 2024, staying informed and adapting to these modifications will be crucial. Consider consulting tools like the Stiftung-Warentest calculator for a detailed analysis of your take-home income after deductions.

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