Tax-free allowance for pensioners: When taxes have to be paid

Pensions in Germany have to be taxed above a certain amount. How high the tax-free allowance for pensioners is and when you have to pay taxes is explained in the following practical tip.

Allowance for pensioners

The pension allowance is the part of the pension that is not taxed. How much it is depends on the first reference year. The tax-free amount remains unchanged over the entire pension period and depends on the gross annual pension.

• Old-age pensions do not have to be fully taxed. The taxation percentage has risen steadily since 2005. 80% of the pension is assessed for pensioners from 2020, and in 2023 it is now 83%.

• Additional income, such as rental income may need to be taxed. The income increases their total income, so it depends on the amount and type of income whether tax is due.