Grundfreibetrag (German basic tax-free allowance)
The annual income amount that is fully exempt from German income tax — €12,348 for 2026.
The Grundfreibetrag is the income amount each German taxpayer can earn each year before any Einkommensteuer (income tax) applies. For 2026 it is set at €12,348, raised from €12,096 in 2025 by the Steuerfortentwicklungsgesetz. It is the German equivalent of the UK Personal Allowance and the US standard deduction — but applied as a built-in tax-curve threshold rather than a deductible.
The Grundfreibetrag is baked into §32a EStG, the law that defines the German income-tax curve. The curve is a continuous polynomial — there are no discrete bands like the UK or US — so the rate just above the Grundfreibetrag starts at 14% (the Eingangssteuersatz) and rises smoothly into the higher zones. Sozialversicherung contributions (Kranken-, Renten-, Arbeitslosen-, Pflegeversicherung) apply separately and are NOT reduced by the Grundfreibetrag.
It applies regardless of Steuerklasse; SK III gets twice the amount (Ehegattensplitting). The Germany calculator on this site uses the 2026 value baked into the §32a polynomial constants.
Calculator pages that use this term
See also
- Steuerklasse (German tax class) — One of six categories that determines how much Lohnsteuer is withheld each month from German payroll.
- Spitzensteuersatz (German top marginal rate) — The 42% peak marginal rate of German income tax — kicks in around €68,481 of taxable income (2026).
- Gross pay — The total annual salary before any tax, social-insurance, or pension deductions are taken out.
- Marginal tax rate — The percentage paid in tax on the next unit of income earned — distinct from the average effective rate.