As of: April 4, 2024, 9:05 a.m
By: Matthias Schneider
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Many pensioners are accountable to the tax office - but that does not immediately mean a high tax burden. Here's an overview of when you have to file a tax return and how you can save money.
Munich – Pensioners also often have to submit a tax return – and have many options to reduce their tax burden. Stiftung Warentest provides an overview.
When do pensioners have to pay taxes?
Every citizen has a basic allowance of 10,908 euros per year, which does not have to be taxed. If the income, regardless of its type, is above this amount, the excess must be taxed. The tax rate increases every year (see table). At the same time, the tax burden for pension provision falls. The tax burden is gradually shifted from the savings phase to the payout phase. The federal government recently relieved pensioners here: thanks to the Growth Opportunities Act, pension taxation no longer increases by one percentage point per year, but by half. From the respective tax rate, the tax office calculates the individual pension allowance in the first year of full pension receipt.
Example
Anyone who retires in 2024 with a statutory pension of 12,000 euros will have a pension allowance of 2,040 euros thanks to the tax-free portion of 17 percent. If you deduct this from your pension income, the result is 9,960 euros. This is less than the basic allowance - there is no tax liability. This can change over time: The pension allowance remains a fixed amount, so pension increases must be taxed.
Table: How much of the pension is tax-free
Start of pension (year) |
How much of the pension is tax-free (%) |
...taxable (%) |
Until 2005 |
50 |
50 |
2021 |
19 |
81 |
2022 |
18 |
82 |
2023 |
17.5 |
82.5 |
2024 |
17 |
83 |
1) Values for other age groups can be found in the table in the Income Tax Act, Section 22. 2) Based on this tax-free portion and the total pension in the first full calendar year after the start of retirement, the tax office determines a pension allowance. Source: Stiftung Warentest
What about private provision?
With private pension insurance, the situation is exactly the opposite: the later you retire, the higher the tax allowance. If you retire at 67, you only have to count 17 percent of your private pension against your taxable income. For pensions from a company pension plan, it depends on whether the entries were paid from taxed income. If this is the case, the same favorable taxation applies as for private pension insurance. If the contributions come from untaxed income, they must be fully added to the taxable income.
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Many pensioners are accountable to the tax office - but that does not immediately mean a high tax burden. (Symbolic image) © Dwi Anoraganingrum/Imago
When do pensioners have to submit a tax return?
Basically whenever multiple incomes come together. The most common constellation: someone receives a pension or is self-employed and at the same time receives more than 410 euros in pension per year.
Is the tax return still worth it?
Often: Yes. The tax office deducts a flat rate for advertising costs (102 euros), special expenses (36 euros) and basic contributions to health and nursing care insurance, but there are significantly more deductible items.
Advertising costs:
In addition to general advertising costs, the costs for legal and pension advice, as well as trade union contributions, are deductible. However, work equipment such as cell phones or a PC are excluded.
Part-time job:
Anyone who has a job in addition to their pension according to tax class will receive a flat rate of 1,230 euros in business expenses from the tax office. If the costs of working from home or commuting to work exceed this value, you can deduct the additional costs.
Special expenses:
The tax office automatically deducts the contributions for the basic contributions to health and nursing care insurance. If this does not add up to 1,900 euros per year, pensioners can deduct contributions for other insurance, such as liability, up to this value. Other deductible items include maintenance payments to ex-partners and donations.
Illness and care:
If the costs of an illness exceed a reasonable personal contribution, the costs are tax deductible. Stiftung Warentest offers a free online pension calculator that helps estimate the amount. Anyone who cares for relatives free of charge benefits from the flat-rate care allowance.
Capital gains:
Income from interest, dividends and securities sales are taxed at a flat rate of 25 percent. If the individual tax rate is lower, you can get the difference back through your tax return.
Craftsmen and carers:
The costs for household-related services can have a tax impact: up to 20,000 euros can be deducted for a care service. 20 percent of the craftsman's costs are recognized up to 6,000 euros.
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