How Germany taxes a retirement plan
Every figure this model charges in Germany, what each one means, the tax office page it came from, and the date we last read it. Plus everything the model does not do here.
The tax chapter of what the model assumes about Germany.
Figures are for the 2026 tax year, read from the authorities on 2026-07-27. Every one of them links to the page it came from.
Checked against their calculator. That check reaches part of the calculation, not all of it; the rest is worked through by hand from the authority's own rules.
The scale your pension and other ordinary income are charged on. Each band's rate applies only to the part of your income inside it, not to all of it.
Amounts subtracted from your income before the bands are applied, so they save you tax at your highest rate rather than at a flat one.
- Flat allowance for costs€102
- A fixed sum treated as the cost of earning the income, given without receipts.
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Solidarity surchargeSolidaritaetszuschlag
A charge on the income tax you owe rather than on your income. Most retirees pay nothing, because it only starts once your tax bill passes a high floor, and it eases in above that rather than jumping.
- Phase-in rate11.90%
- Just above the starting point the surcharge is eased in at this rate, so it does not jump straight to the full amount.
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Yearly charge on funds that pay nothing outVorabpauschale
A fund that rolls its income up instead of paying it to you is still charged each year, on an assumed return set from a published base rate. It falls to nothing in a year the fund did not rise, and what you pay is credited against the tax when you eventually sell.
- Assumed yearly return3.20%
- A published base rate the charge is worked out from. It falls to nothing in a year the fund did not rise.
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What happens when you draw from a pension or retirement account: the whole withdrawal counted as income, a set rate, or nothing at all.
- Share of the pension taxed0.84
- How much of a state pension counts as income. It depends on the year you started drawing, and is then fixed for life.
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Whether a couple is assessed as one household or as two people, which can change the bill substantially at the same total income.
- How a couple is assessedsplitting
- Whether the two incomes are pooled, split evenly, or taxed entirely separately.
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How money held outside a retirement account is charged: on what it pays you each year, on the profit when you sell, or both.
- Charged howseparate
- Whether investment income joins your other income on the same scale or is charged separately. It decides whether taking more from your portfolio pushes your pension into a higher band.
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- Charged as it pays outyes
- Whether income the investment pays you is charged in the year it arises, rather than only when you sell.
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- Charged on an assumed returnno
- The country charges you on a return it assumes you made, rather than on what you actually made.
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What a loss can be set against, and whether anything left over can be carried into future years.
- Carried forward forno limit
- How many years an unused loss survives to be set against future gains. Zero means it is lost at the end of the year.
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- Locked to one kind of assetshare loss ringfence s20 6 s4
- A loss on one kind of investment can only be set against gains of the same kind.
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- Against other income, up tono limit
- The most a loss can take off your ordinary income in one year.
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- Share usable against other income0
- How much of a leftover loss can be set against income that is not investment income.
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equity
Where this country's answer changes depending on the kind of investment, this is what we assume unless you say otherwise.
A threshold frozen in law quietly costs more every year, because your income rises with prices and the threshold does not. Over a thirty-year retirement that is one of the larger effects on this page.
- an ordinary investment account · Keeps up with inflationno
- If no, this figure is fixed in law. Your income rises with prices and it does not, so it costs you more every year without any rule changing.
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Where you live inside the country
Nothing below the national level taxes income here, so one set of figures is right for the whole country. This is a finding rather than a gap.
What this model does not do here
Every one of them, not a selection. 5 are described below.
We model these and we know we do not get them exactly right. Where the size could be measured, it is stated.
We assume you are covered by the health insurance scheme for pensioners, where money you draw from savings and any rent you receive carry no health or care contributions. If you are voluntarily insured in the statutory scheme instead, both do carry them, worth up to about 14,300 a year. We do not ask which of the two you are in, and we do not ask about private cover either.
Your real tax is higher/up to €14,300 a year/pensioners voluntarily insured in the German statutory scheme rather than covered as pensioners
Germany's tax favoured pension products each pay out under their own rules: the Riester and Ruerup personal plans, and a company pension arranged through an employer. We tax everything in a deferred account as ordinary income in the year you draw it, and we never ask which product you hold, so a plan built around one of them can come out wrong in either direction.
Could go either way/anyone whose German retirement savings sit in a tax favoured pension product rather than an ordinary account
These exist in law and we leave them out, usually because applying them would need a question we do not ask.
Germany charges church tax of 8 to 9 percent of the income tax you are assessed, and only members of a church that collects it through the tax office pay it. We never ask whether you are a member, so if you are, every German tax figure here is too low by roughly that share of it.
Your real tax is higher/members of a church that collects tax through the state
Fund units bought before 2009 kept the older and more generous treatment: the gain on them is free of tax up to a lifetime allowance of 100,000, and we do not model that at all. If you still hold units from before 2009, the tax we show on selling them is too high until that allowance is used up.
Your real tax is lower/anyone still holding fund units bought before 2009
Separate tax systems, or rules that only bite outside a retirement plan.
German property is taxed in ways this model leaves out completely: a yearly municipal charge on property you own, a one off charge when you buy, and a tax on the gain when you sell. They are property taxes rather than taxes on your plan, so none of them reach the figures here. The yearly one recurs for as long as you own the place, so keep it in your housing costs and do not look for it in the tax.
Your real tax is higher/anyone who owns, buys or sells German property
Every other figure we use for this country (53)
The sections above cover what shapes a retirement plan. These are the rest of what the model reads, listed so nothing it uses is hidden from you.
besteuerungsanteil_by_start_year.20200.8sourcebesteuerungsanteil_by_start_year.20210.81sourcebesteuerungsanteil_by_start_year.20220.82sourcebesteuerungsanteil_by_start_year.20230.825sourcebesteuerungsanteil_by_start_year.20240.83sourcebesteuerungsanteil_by_start_year.20250.835sourcebesteuerungsanteil_by_start_year.20260.84sourcebesteuerungsanteil_by_start_year.20270.845sourcebesteuerungsanteil_by_start_year.20280.85sourcebesteuerungsanteil_by_start_year.20290.855sourcebesteuerungsanteil_by_start_year.20300.86sourcebesteuerungsanteil_by_start_year.20310.865sourcebesteuerungsanteil_by_start_year.20320.87sourcebesteuerungsanteil_by_start_year.20330.875sourcebesteuerungsanteil_by_start_year.20340.88sourcebesteuerungsanteil_by_start_year.20350.885sourcebesteuerungsanteil_by_start_year.20360.89sourcebesteuerungsanteil_by_start_year.20370.895sourcebesteuerungsanteil_by_start_year.20380.9sourcebesteuerungsanteil_by_start_year.20390.905sourcebesteuerungsanteil_by_start_year.20400.91sourcebesteuerungsanteil_by_start_year.20410.915sourcebesteuerungsanteil_by_start_year.20420.92sourcebesteuerungsanteil_by_start_year.20430.925sourcebesteuerungsanteil_by_start_year.20440.93sourcebesteuerungsanteil_by_start_year.20450.935sourcebesteuerungsanteil_by_start_year.20460.94sourcebesteuerungsanteil_by_start_year.20470.945sourcebesteuerungsanteil_by_start_year.20480.95sourcebesteuerungsanteil_by_start_year.20490.955sourcebesteuerungsanteil_by_start_year.20500.96sourcebesteuerungsanteil_by_start_year.20510.965sourcebesteuerungsanteil_by_start_year.20520.97sourcebesteuerungsanteil_by_start_year.20530.975sourcebesteuerungsanteil_by_start_year.20540.98sourcebesteuerungsanteil_by_start_year.20550.985sourcebesteuerungsanteil_by_start_year.20560.99sourcebesteuerungsanteil_by_start_year.20570.995sourcebesteuerungsanteil_by_start_year.20581sourcecapital_incomeseparate_flat_with_progressive_electionsourcecode:besteuerungsanteil_clip_high2058sourcecode:besteuerungsanteil_clip_low2020sourcecode:pension_start_year_default2026sourceholdings.equity.items[0].delta.deemed_income_taxedtruesourceholdings.equity.items[0].delta.dividend_taxable_share0.7sourceholdings.equity.items[0].delta.gain_taxable_share0.7sourceholdings.equity.items[1].delta.deemed_income_taxedtruesourceholdings.equity.items[1].delta.distributions_taxedfalsesourceholdings.equity.items[1].delta.dividend_taxable_share0.7sourceholdings.equity.items[1].delta.gain_taxable_share0.7sourceholdings.equity.items[2].delta.deemed_income_taxedtruesourceholdings.equity.items[2].delta.dividend_taxable_share0.85sourceholdings.equity.items[2].delta.gain_taxable_share0.85source
Health and care contributions on your pensionKrankenversicherung der Rentner
Taken from the state pension before you receive it, and stopping above a ceiling. They are a real cost whether or not the law calls them tax.