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German income tax reform and Minijob regulatory changes

Updated 22 times since CLSTR started tracking revisions of this situation.

What changed

2026-09-16 05:56 UTC → 2026-09-30 12:48 UTC · added removed

The German federal government is proceeding with an income tax reform scheduled for January 1, 2027, which aims to provide approximately 10 billion euros in annual tax relief. To ensure political acceptance, the Ministry of Finance has removed certain planned subsidy cuts, such as the abolition of the tax-free allowance for employee discounts, resulting in an expected revenue reduction of 1.55 billion euros for 2027. The reform includes a two-phase increase of the basic tax-free allowance to 12,564 euros in 2027 and 12,900 euros by 2028. Additionally, the threshold for the 42 percent top tax rate will shift from 69,879 euros to 70,600 euros. To fund these measures, the government is restructuring the ‘Reichensteuer’ (rich tax) by introducing new tiers: a 45 percent rate starting at 250,000 euros and a 47 percent rate for income exceeding 280,000 euros. Finance Minister Lars Klingbeil stated the reform aims to ensure high earners make a larger contribution as a matter of fairness. New details from the approved draft indicate that families will benefit from increased child benefits (Kindergeld), rising from 259 to 267 euros per month in 2027 and reaching 272 euros in 2028. The standard deduction for employees is also set to rise from 1,230 to 1,430 euros. Regarding the ‘Minijob’ system, the flat-rate tax for marginal employment is set to increase from 2 to 5 percent, while the monthly earnings limit is set to rise to 633 euros due to the statutory minimum wage increasing to 14.60 euros per hour. The proposal faces significant opposition from the CDU/CSU Union, with politicians such as Fritz Güntzler and Florian Dorn arguing that the relief is insufficient to offset ‘cold progression’ and demanding total relief exceeding 15 billion euros. The draft must still pass through the Bundestag and Bundesrat.

Versions

  1. 2026-09-30 12:48 UTC German income tax reform and Minijob regulatory changes
  2. 2026-09-16 05:56 UTC German income tax reform and Minijob regulatory changes
  3. 2026-09-05 02:17 UTC German income tax reform and Minijob regulatory changes
  4. 2026-09-04 16:38 UTC German income tax reform and Minijob regulatory changes
  5. 2026-09-03 16:37 UTC German income tax reform and Minijob regulatory changes
  6. 2026-09-03 13:45 UTC German income tax reform and Minijob regulatory changes
  7. 2026-08-22 00:05 UTC German income tax reform and Minijob regulatory changes
  8. 2026-08-21 10:14 UTC German income tax reform and Minijob regulatory changes
  9. 2026-08-21 09:03 UTC German income tax reform and Minijob regulatory changes
  10. 2026-08-21 09:03 UTC German income tax reform and Minijob regulatory changes
  11. 2026-08-21 07:42 UTC German income tax reform and Minijob regulatory changes
  12. 2026-08-21 05:45 UTC German income tax reform and Minijob regulatory changes
  13. 2026-08-21 03:31 UTC German income tax reform and Minijob regulatory changes
  14. 2026-08-20 17:41 UTC German income tax reform and Minijob regulatory changes
  15. 2026-08-20 11:48 UTC German income tax reform and Minijob regulatory changes
  16. 2026-08-20 06:47 UTC German income tax reform and Minijob regulatory changes
  17. 2026-08-20 03:38 UTC German income tax reform agreement for 2027
  18. 2026-08-19 18:25 UTC German income tax reform agreement for 2027
  19. 2026-08-19 15:53 UTC German income tax reform agreement for 2027
  20. 2026-08-19 10:39 UTC German income tax reform agreement for 2027
  21. 2026-08-18 12:07 UTC German income tax reform proposal
  22. 2026-08-18 12:05 UTC German income tax reform proposal
  23. 2026-08-13 08:41 UTC German income tax reform proposal

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