Germany: Pension tax-free thresholds for 2026

According to an overview from the German Federal Ministry of Finance, a single retiree starting pension payments in 2026 could potentially pay zero income tax on a gross annual pension of up to 17,084 euros, provided they have no other taxable income.

This figure is not a general tax-free threshold but a model calculation. While the basic tax-free allowance (Grundfreibetrag) for 2026 is set at 12,348 euros, the higher pension amount is possible because only 84 percent of the pension is subject to taxation for those starting in 2026. The remaining 16 percent is initially excluded from the taxable portion of the income.