Germany

Social security contributions

As of 1 January 2025, the income ceiling for mandatory pension insurance has increased from 90,600 euros (EUR) to EUR 96,600. The adjustment of the contribution ceiling is also applicable to unemployment insurance. Additionally, the income ceiling for mandatory health and long-term care insurance in 2025 has increased to EUR 5,512.50 per month (EUR 66,150 per year).

In the pension and unemployment insurance, the contribution assessment ceiling will increase to EUR 101,400 per year, or EUR 8,450 per month, in 2026. In the statutory health and long-term care insurance, the contribution assessment ceiling will increase to EUR 69,750 per year, or EUR 5,812.50 per month.

The 2025 contribution rate to German state unemployment insurance will remain 2.6%. The rate for pension insurance is 18.6%. The contribution rate to the health insurance system is fixed at 14.6% and the rate for Long-term care insurance at 3.6% (4.2% for childless individuals). However, there are contribution reductions for families with children and a contribution surcharge for childless individuals. All mentioned rates are shared equally between employer and employee.

COVID-19 reliefs

A number of COVID-19 relief measures were enacted in 2020. The maximum amount of loss carryback for income tax purposes was increased to EUR 10 million (single filing) / EUR 20 million (married filing) for tax years 2020, 2021, 2022, and 2023. In 2024, the amount limits were returned to the legal status prior to 2020 of EUR 10 million to EUR 1 million (single filing) / of EUR 20 million to EUR 2 million (married filing).

A home office lump sum expense of EUR 6 per day for a maximum of 210 days per calendar year may be claimed for tax purposes. The limit for the entire year of EUR 1,260 can also be applied as a flat rate for a full year of home office. Deadline changes due to COVID-19 are only applicable for the submission of the 2023 and 2024 income tax returns. If a tax advisor is instructed, the deadline for tax return 2024 is 30 April 2026 (without a tax advisor, the submission deadline is 31 July 2025). For the tax year 2025, the regular deadlines of the income tax returns are reimplemented. Therefore, the tax return for the tax year 2025 will be due on 31 July 2026; if a tax advisor is instructed, the deadline is extended to the end of February 2027.

Property tax

As the former system of the property tax has been declared unconstitutional by the German Federal Constitutional Court, property tax will be levied on the basis of the new law from 1 January 2025 onwards. The property tax reform of 2025 replaces the previous unconstitutional system from 1935/1964 with a new valuation model that takes into account the current value of the property. From 2025, new assessment rates will apply, and property tax notices will be based on the new valuations. The reform leads to individual shifts in the tax burden but aims to keep the overall tax revenue constant. The German Federal Finance Court recently decided that it considers this property tax reform to be constitutional. However, the parties that lost the legal dispute have already announced that they will lodge a constitutional complaint with the German Federal Constitutional Court.