Overview

• On July 1, 2025, statutory pensions in Germany will increase by 3.74%.
• The entire pension raise is taxable and is expected to push about 73,000 retirees above the €12,084 basic exemption, obliging them to file returns.
• Pensioners who exceed the exemption can claim deductions for healthcare costs, special expenses and extraordinary burdens to reduce or eliminate their tax bills.
• New retirees in 2025 drawing only pension income can receive up to €17,148 gross without owing taxes, based on their year of retirement.
• Under current law, the share of pension income subject to taxation rises annually and is scheduled to reach full taxation by 2058.