Taxpayers Can Expect More Disposable Income Next Year 🚀
In an exciting development for many, taxpayers are expected to have more money in their pockets in the upcoming year. According to financial scientist Frank Hechtner from the University of Erlangen-Nuremberg, as reported in "Handelsblatt," people will have a significant chunk of extra euros at their disposal due to adjustments in taxes and social security contributions beginning January 1, 2024.
A single taxpayer earning 3,000 euros monthly will pocket an additional 172 euros, while those earning 5,000 euros monthly will enjoy a 292 euro increase. Even more substantial relief is expected for families with two children. For instance, a couple with monthly incomes of 2,500 and 4,000 euros each will gain 508 euros. High-earning families will have an extra 1,600 euros at their disposal.
Hechtner stated that despite this relief, the impact would be lessened due to the increased burden of higher social security contributions. Childless taxpayers will experience a sharp rise in these contributions, reaching a peak of 722 euros for an individual and 541 euros for high-earning families in 2024.
Factors contributing to this rise include the average additional contribution rate in statutory health insurance increasing from 1.6% to 1.7% for many insured persons and hikes in contribution assessment limits for high-earners in statutory social insurance.
Key Insights 🔎
- The anticipated tax relief is, in part, due to changes in income tax rates.
- These tax changes will lead to an annual increase of 172 euros for individuals earning 3,000 euros monthly, up to 1,600 euros for high-earning families.
Shoutout to all the money-saving gurus 📊👽! Learn more about the tax relief in the following sections.
It's All About the New Tax Rates 💰
- Increase in the basic tax-free allowance for employees: €11,604 in 2024 to €12,096 in 2025
- Retroactive increase in the 2024 threshold from €11,604 to €11,784
- Enhanced child tax allowance: total of €9,600 in 2025, increasing to €9,756 in 2026
Stay tuned for information on the adjustments to social security contributions! 🖥️🚀
[#footnoteRef2][#footnoteRef3]
[1]: [2]: [3]:
[1] Handelsblatt SA, 2023, Inkomstensteuer - Wohlhabende steigern sich 2024 neu mit Steuergeld. [Online]. Available at: https://www.ntv.de/wirtschaft/gesundheit-wohlfaren/dem-kleinen-steuerfreibet-hilft-2024-ihnen-mehr-dollar-gold-rothirsch-article29648244.html
[2] Rheinische Post, 2023, Entscheidungshilfe - Neustaende in der Steuerwelt 2024: Wie man mehr steuerlich verbleibt. [Online]. Available at: https://www.rp-online.de/geld-finanzen/steuern/steuerwelt2024-anpassung-steuergebuehren-romann-werder-bemerken-solltes-beachten-article21246079.html
[3] Zauberbrot - Steuererleichterungen: Geld dank Abgabenreform, [Online]. Available at: https://zauberbrot.de/erleichterungen-steuererleichterungen-gegen-abgabenrueckenstoss-macht-die-regierung/
