Germany

Social security contributions

As of 1 January 2024, the income ceiling for mandatory pension insurance has increased from 87,600 euros (EUR) to EUR 90,600 (EUR 89,400 in the new federal states). 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).

The 2025 contribution rate to German state unemployment insurance will remain 2.6% compared to 2024. 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 nursery care insurance at 3.4%. 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 in 2023, 2024 and 2025. 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).

Property tax

As the current 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.