Pension of 1200 euros: What is really left for pensioners in Germany
Created: 2023-01-02 06:05
By: Caroline Schäfer
The pension must also be taxed.
But how much tax do pensioners have to pay?
That depends on various factors.
Kassel – Contrary to popular belief, pensions are generally taxable.
In 2005, 50 percent of the gross pension was recognized as taxable income.
The percentage of the taxable part increases by two percentage points every year.
In 2023, 84 percent will already count as taxable income.
In 2040 or later, income tax will be levied on the entire pension.
However, a so-called pension allowance applies to everyone who receives their first pension by 2039.
This part of the pension does not have to be taxed.
"The pension allowance is a fixed euro amount and will remain unchanged in the following years," informed the German pension insurance.
The exempt amount does not change if the pension increases at a later date.
This is reported by hna.de.
Anyone retiring this year will have to pay tax on 82 percent of their pension.
© Hauke-Christian Dittrich/dpa
1200 euros pension: which taxes then have to be paid
However, this does not automatically mean that recipients with a small pension also have to pay taxes.
This is where the basic allowance comes into play.
In 2022, this will be 10,347 euros for single people.
This is to ensure the subsistence level.
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For example, anyone who retires in 2022 and receives a monthly gross pension of 1000 euros has a pension allowance of 18 percent.
Thanks to the tax-free allowance, only 9,840 euros of the total of 12,000 euros per year have to be taxed.
However, this would also mean that the person would fall under the basic allowance, which is why the pension does not have to be taxed.
Then there are the contributions to health and long-term care insurance.
1200 euros pension: That's how much tax pensioners have to pay
The average pension amount for men in 2021 was around 1200 euros in the old federal states and 1141 in the new federal states, according to the German pension insurance.
The table below shows what the taxable portion would be at this level depending on the year of retirement age:
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