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German pension taxation — taxable share and frozen exempt amount

What is frozen is NOT the percentage but a euro amount. Every pension increase is therefore FULLY taxable, and the effective taxable share climbs above the table figure year after year. Applying the percentage to the CURRENT pension understates the income.

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This content is part of the path: Retiring· Step 6 of 11· Next step: German pension account clarification: form V0100

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Sources and assumptions

Calculation assumptions

  • The exempt part is the difference between the annual amount and the taxable share (sentence 4) and applies from the year following the year the pension began (sentence 5). The calculator derives it from the annual pension of the FIRST FULL year; the year the pension began is not itself modelled (EStG s. 22 no. 1 sentence 3(a)(aa)).
  • A single pension: where pensions from the same insurance follow one another, sentence 8 sets the percentage by a NOTIONAL year, which may never fall before 2005.
  • Excluding the expenses allowance and special expenses: what is computed is the taxable part of the pension, not taxable income.

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This result is provided for information purposes only and does not constitute personalised tax advice. Check your situation with the tax authorities or a professional.