Pension taxation: Who actually has to pay?

Almost one in four is affected

Created: 07/02/2022, 06:01

By: Klaus Rimpel

Many millions of pensioners in Germany pay pension tax on their retirement benefits.

© IMAGO/Michael Gstettenbauer

When it comes to pension tax, not all recipients are treated equally in Germany.

We explain for whom the income is taxable and from when.

Berlin - In 2020, a total of around 5.12 million seniors were taxable - almost every fourth pensioner.

But many seniors are unsure whether their retirement benefits are also subject to tax.

The Federal Association of Wage Tax Assistance Associations has now calculated the pension amount up to which no taxes will be due in 2021: If the pension begins in 2021, an annual gross pension of around 14,100 euros will remain tax-free.

If you retired in 2005 or earlier, you don't have to worry about paying taxes if you have a gross annual pension of up to around 19,500 euros.

Pension taxation: The taxable portion increases for new generations

The reason for this is that only pensioners whose income exceeds the basic allowance (2021: 9984 euros, 2022: 10,347 euros) have to file a tax return.

The whole thing becomes complicated because the taxable portion of the pension increases by one percentage point each year for each new year of pensioners.

For pensioners who retire this year, only 18 percent of their pension remains tax-free - the rest is taxed.

In 2040, all pensions will be taxed at 100 percent.

The table shows the amount up to which pensioners without additional income do not have to pay tax.

Double values ​​apply to married couples:

Overview: From this pension amount, taxes must be paid in Germany.

© fkn

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