Germany income tax reform 2027: what is proposed for expats?
Talents in Germany editorial team
As checked on 10 October 2026, the reform is a bill. The Bundestag held its first reading on 8 October and referred it to committees. That is not final enactment.Bundestag · first reading and committee referral
Planned from 2027, with a further step in 2028; subject to the final law.
| Measure | Proposed 2027 | Proposed 2028 |
|---|---|---|
| Basic tax-free allowance (Grundfreibetrag) | €12,564 / year | €12,900 / year |
| Child benefit (Kindergeld) | €267 / child / month | €272 / child / month |
Other changes employees should watch
The draft also proposes a €1,430 employee expenses allowance (Arbeitnehmer-Pauschbetrag) and changes to the highest income-tax rates. Do not assume that the proposal reduces every taxpayer’s bill.Bundestag · first reading and committee referral
What has actually been decided?
The cabinet approved a draft on 2 September. It proposes changes in two stages, starting in 2027 and reaching full effect in 2028. A cabinet decision to introduce a bill does not make its figures binding payroll rules.Bundesregierung · cabinet draft
Why a larger allowance is not the same as extra take-home pay
When comparing an offer, keep annual gross pay, taxable income and monthly net pay separate. An allowance is not a cash payment of the same amount. Do not add its full increase to your monthly spending budget.
Our salary calculator states the year it uses. Treat its result as an estimate for that year; these proposed 2027 figures have not been inserted into the calculator. A future net-pay estimate will also need the relevant social-insurance parameters.
What should international employees and families check?
For a move or job starting in 2027, ask payroll to identify the tax year behind any net-pay illustration. If your situation includes overseas income, a move during the year or children living abroad, ask a tax adviser or the responsible authority which assumptions apply before relying on a family example.
What to do now
- Compare job offers using annual gross salary, working hours and benefits. Keep proposed tax savings separate in your budget.
- Keep the tax year and assumptions alongside every saved net-pay estimate.
- Recheck the parliamentary record and the final published law before using 2027 allowances for a financial decision.
Common questions
- Is Germany’s 2027 income-tax reform already law?
- At our 10 October 2026 review, it was a bill referred to committees after its first Bundestag reading on 8 October. The article therefore labels it a proposal.Bundestag · first reading and committee referral
- Does the TiG salary calculator already include the proposed reform?
- No. The calculator uses the year shown on its page. The proposed figures in this news article do not change the salary calculation.
- How much more net salary will I receive in 2027?
- This article does not calculate a personal 2027 net salary. Wait for the final rules and use your own payroll details; an allowance increase cannot be read as an equal cash increase.