What's the difference between tax exemption (Freibetrag) and fixed deduction (Pauschbetrag)?
Tax exemptions and fixed deductions simplify your life and that of tax authorities by simplifying your tax return. If certain tax-related values remain below prescribed amounts, you do not have to tax your income or prove your expenses.
What are tax exemptions (Freibeträge)?
These are amounts for specific expenses or income that are not taxed. They are either deducted or defined when taxation begins. Only the portion of these expenses exceeding the tax allowance is taxed. This value is not to be confused with an exemption limit. If this is exceeded, the entire amount must be taxed.
Example: If your income is below the basic tax-free allowance of 10,347 euros (2022), you don’t have to pay income tax. A standard income tax is only calculated on an income higher than this limit.
|Basic tax-free allowance (Grundfreibetrag)||10,347|
|Child allowance (Kindfreibetrag)||8,548|
|Relief amount for single parents (Entlastungsbetrag für Alleinerziehende)||4,008+240|
|Training allowance (Ausbildungsfreibetrag)||1,200|
|Training instructor allowance (Übungsleiterfreibetrag)||3,000|
|Honorary allowance (Ehrenamtsfreibetrag)||840|
|Allowance on benefits (Versorgungsfreibetrag)||Varies|
|Retirement benefit (Altersentlastungsbetrag)||Varies|
Explained: Most important fixed deductions (Pauschbeträge) for the employed
Basic tax-free allowance (Grundfreibetrag)
The Grundfreibetrag is the annual basic allowanceThe basic allowance makes all income up to a certain amount tax-free; based on the subsistence level (minimum amount of money a person needs to live) in Germany. This amount …
Read more , which is tax-free. So if you earned less than 10,347 euros after deduction of costs or lump sums, you do not pay income tax. Double the amounts apply to married couples.
How do you get it? Automatically. Your employer takes it into account when calculating your income tax.
Childcare allowance (Kinderfreibetrag)
The state relieves families with children with the childcare allowance. In the year 2022, parents are entitled to a tax allowance of 8,548 euros per child. This amount consists of:
- 2,928 euros for care, education and training
- 5,460 euros for the material subsistence level of the child
In the case of individually assessed couples, each partner is entitled to half the child allowance.
How do I get it? The tax allowance will only be taken into account by the tax office if the tax savings from the deduction of the allowance are higher than the child benefit paid out. This is usually the case with a high tax rate, i.e. a high income, and is indicated when the tax return is submitted using the cheaper check or ‘Günstigerprüfung’ checked automatically. (More information at: Apply for child benefit or child allowance)
Important fixed deductions at a glance
Single parents are usually more financially burdened. Therefore, for 2022, as in the previous year, they can deduct a tax relief amount of 4,008 euros from their income. An amount of 240 euros is added for each additional child living in the household.
How do I get it? Simply apply for it when you submit your tax return. If you have the tax class II, it will automatically be taken into account in your income tax calculation.
knows the necessary allowances and fixed deductions to help you claim optimised tax returns.
Relocation allowance (Umzugskostenpauschale)
Are you a volunteer? for Do you engage in voluntary activities in a youth club or an animal protection association? Then, you have 2024 an annual tax allowance of 840 euros.
How do I get it? You enter the voluntary work allowance in the Taxfix question flow when prompted or enter it in your tax return.
You cannot use the trainer allowance and volunteer allowance for the same activity.
Special Expenses Allowance
Every year, the tax office automatically deducts a flat rate of 36 euros for Special expenses from taxable income if no other special expenses were specified. For couples assessed together, it is euros.
How do I get it? Automatically – higher costs (e.g. Insurance premiums, Child care costs or donations) you can deduct by simply answering the respective questions in the Taxfix app or by stating it in your tax return via ELSTER.
|Length of Absence||Lump-sum (2021)|
|8 hours onwards||14€|
|24 hours onwards||28€|
|Day of arrival or departure||14€|