Flat rate pension
The pension lump sum is an amount that is taken into account when calculating wage tax in Germany in order to make the taxpayer's expenses for social security tax-free. It is to be distinguished from the pension expenses, which are deducted as special expenses in the context of an income tax return.
If a taxpayer has received wages , a lump sum based on gross income is deducted from income as an exemption for pension expenses, Section 39b (2) number 3 EStG . As part of an income tax return, a taxpayer can prove expenses that lead to a higher deduction than actual pension expenses . There is no provision for an exemption above the flat-rate provision as part of an application for a wage tax reduction.
Right from 2010
| year | Correction factor |
|---|---|
| 2005 | 20% |
| 2006 | 24% |
| 2007 | 28% |
| 2008 | 32% |
| 2009 | 36% |
| 2010 | 40% |
| 2011 | 44% |
| 2012 | 48% |
| 2013 | 52% |
| 2014 | 56% |
| 2015 | 60% |
| 2016 | 64% |
| 2017 | 68% |
| 2018 | 72% |
| 2019 | 76% |
| 2020 | 80% |
| 2021 | 84% |
| 2022 | 88% |
| 2023 | 92% |
| 2024 | 96% |
| 2025 | 100% |
From 2010, the flat rate pension will only be included in the calculation of wage tax. From 2010, only the actual pension expenses will be taken into account when assessing income tax. The correction factors in the table at the top right only apply to wage tax due to the different calculation method.
Example for 2019
Monatsbrutto 2.500 Euro, Jahresbrutto 30.000 Euro, Steuerklasse I, Alter 38 Jahre, 2 Kinder
1.) Teil-Vorsorgepauschale für Rentenversicherung
→ 30.000 Euro × 0,093 (halber RV-Beitrag von 18,6 %)
= 2.790 Euro davon 76 % im Jahr 2019 (in jedem weiteren Jahr vier Prozentpunkte mehr)
= 2.120,40 Euro
2.) Teil-Vorsorgepauschale für Kranken- und Pflegeversicherung
a) Mindestansatz
12 % des Arbeitslohns (30.000 Euro × 0,12 = 3.600 Euro)
jedoch höchstens 1.900 Euro (bei Unverheirateten)
= 1.900 Euro
b) Arbeitnehmeranteil bei gesetzlich Versicherten
für Krankenversicherung 7,45 %
(verminderter Beitragssatz Basisversorgung 7,0 % + 0,45 % (halber Zusatzbeitrag von 0,9 %)) und
für Pflegeversicherung 1,525 %
= insgesamt 8,975 %
8,975 % von 30.000 Euro = 2.692,50 Euro
3.) Vergleichsrechnung:
Da die Vorsorgepauschale aus Nr. 1 + Nr. 2b höher ist als aus Nr. 1 + Nr. 2a,
wird der höhere Betrag angesetzt:
Die Vorsorgepauschale für 2019 beträgt also im Beispiel 2.120,40 Euro + 2.692,50 Euro
= 4.813 Euro (aufgerundet).
Right from 2005
The flat rate pension is the sum of
- half of the contribution to the statutory pension insurance (lump sum for pension expenses, corresponds exactly to the employee's share of the pension insurance contributions paid in for employees subject to social insurance) multiplied by the annually increasing correction factor (see table below right), and
- the flat rate for other pension expenses, depending on which is cheaper (cheaper check probably only until 2019):
- either 12% of wages, but no more than 1,900 euros (or 3,000 euros in tax class 3)
- or the value from a comparative calculation that estimates health and long-term care insurance contributions. For those with statutory health insurance, 7.6% of the gross amount subject to social insurance (limited by the income threshold) is taken into account for health insurance and the corresponding rate for long-term care insurance (0.975 to 1.5%)
Wages in this sense is to the exemption for pensions and the age tax allowance reduced annual earned income.
In the calendar years 2005 to 2024, the pension lump sum is to be determined with the stipulation that in the calendar year 2005 the amount resulting from No. 1 is limited to 20%. This percentage (correction factor) increases in each subsequent calendar year by 4 percentage points (see table above).
Right until 2004
| year | Advance deduction |
|---|---|
| 2005-2010 | 3,068 EUR |
| 2011 | 2,700 EUR |
| 2012 | EUR 2,400 |
| 2013 | 2,100 EUR |
| 2014 | 1,800 EUR |
| 2015 | 1,500 EUR |
| 2016 | EUR 1,200 |
| 2017 | 900 EUR |
| 2018 | 600 EUR |
| 2019 | 300 EUR |
| 2020 | 0 EUR |
The rules described here were automatically applied to all taxpayers until 2004. As part of the cheaper test, these regulations will continue to be taken into account when calculating pension expenses for income tax in the period from 2005 to 2019 .
Application from 2005 to 2019
Example 2009
- For income below EUR 19,175 (married EUR 38,350), the difference between the advance deduction of EUR 3,068 (married EUR 6,136) and 16% of the gross wage is deductible. The advance deduction will be gradually reduced from 2011 in accordance with the Retirement Income Act (see table above on the right).
- Up to EUR 1,334 (married EUR 2,668) are deductible from the remaining pension costs.
- Half of the remaining pension expenses are deductible up to an amount of EUR 667 (married persons EUR 1,334).
- For income over EUR 19,175 (married EUR 38,350), pension expenses up to a maximum of EUR 2001 (married EUR 4002) are tax deductible.
- Pension expenses are deductible up to a maximum of 20% of gross wages.
- However, at least the pension lump sum must be deducted: For employees subject to pension insurance, it is calculated from 11% of the gross wages (maximum 1500 EUR) plus 36% of the pension insurance contribution (only employee's share of 9.95%). That is 11% plus 3.582%, which together corresponds to 14.582% of gross wages.