Tax Changes in 2026: What’s Changing for Employees and Retirees
The year 2026 will also bring numerous tax changes—especially for employees and retirees. The Federal Association of Income Tax Assistance Associations (BVL) has compiled the most important changes in income tax and social security law. Below, we provide a concise overview of what will change starting at the turn of the year and what you should pay attention to when filing your tax return.
More take-home pay thanks to higher allowances
As of January 1, 2026, the basic exemption amount will increase again—to 12,348 euros for single individuals and 24,696 euros for married couples or registered partners. This means that income up to this limit remains tax-free. There is also a higher exemption threshold for the solidarity surcharge—it will be 20,350 euros (individual assessment) or 40,700 euros (joint assessment) in the future.
The maximum maintenance allowance—that is, the maximum amount you can claim as an extraordinary burden for dependents—will also increase to 12,348 euros. In addition, contributions to the supported person’s basic health and long-term care insurance can be deducted.
Child benefits and child tax credits are increasing
There are several improvements for families: Starting in January 2026, child benefit will increase by 4 euros to 259 euros per child per month. At the same time, the child allowance for a child’s basic subsistence level will also rise to €3,414 per parent. Including the allowance for care, upbringing, or education, this results in a total allowance of €4,878 (single parents) or €9,756 (married parents).
Retirement Savings and Income-Related Expenses
Starting in 2026, retirement savings contributions—such as those for statutory pension insurance or the Rürup pension—can be fully deducted as special expenses, provided they fall within the new maximum amount of 30,826 euros (or 61,652 euros for joint filing).
In addition, union dues will be recognized as income-related expenses in the future, in addition to the employee allowance. This means they will have a tax impact even if the employee allowance has already been exhausted.
Commuting Allowance and Mobility Bonus
The commuting allowance increases to 38 cents per kilometer starting from the first kilometer. For low-income earners who cannot benefit from the commuting allowance, the so-called mobility bonus will be made permanent and granted on a long-term basis. It amounts to 14 percent of the commuting allowance starting from the 21st kilometer—and must be applied for.
Changes to mini-jobs and volunteer work
With the higher minimum wage of 13.90 euros starting in January 2026, the mini-job limit will also rise to 603 euros per month. In addition, tax allowances for volunteers will be increased: the flat rate for instructors rises to 3,300 euros, and the flat rate for volunteers to 960 euros per year. This relief benefits, for example, coaches, firefighters, and those involved in clubs.
Introduction of the Active Pension
A true innovation is the active pension, which will be introduced in 2026: Those who work beyond the standard retirement age can earn up to 2,000 euros per month tax-free—that is, up to 24,000 euros per year. The prerequisite is employment subject to social security contributions. The aim of the regulation is to keep experienced professionals in the workforce longer.
Higher deduction limits for maintaining two households abroad
For the first time, a flat-rate maximum limit is being introduced for work-related dual household arrangements abroad: Starting in 2026, housing costs of up to 2,000 euros per month can be claimed for tax purposes. This new regulation provides greater clarity and certainty for assignments abroad.
Further tax improvements
Even minor changes bring benefits: Bonuses for participation in the Olympics or Paralympics will be tax-free in the future. For political party donations, the tax-deductible maximum amount has been doubled—to 3,300 euros for single taxpayers and 6,600 euros for married couples, 50% of which can directly reduce the tax burden.
The new non-cash benefit values are also rising slightly. For example, the monthly value for meals will be 345 euros in the future. For breakfast, 2.37 euros per day should be applied, and for lunch or dinner, 4.57 euros each. For lodging and rent, the non-cash benefit value is now 285 euros per month.
Conclusion: 2026 brings major changes in taxation
Whether you’re an employee, a retiree, or a family—the tax changes at the start of 2026 affect nearly every aspect of life. Those who prepare their tax returns well and are familiar with the new allowances and deduction options can benefit specifically from these changes.
As tax advisors in Düsseldorf and Oberhausen, we are happy to assist you in making the most of your tax planning options—whether regarding income tax, questions about retirement planning, or the mobility bonus. Please feel free to contact us for a personalized consultation.
