More money in December: These are the details

Employees can look forward to slightly higher net income in December. This is due to the retroactive increase in the basic tax allowance for 2024.

After the Federal Council at the end of November retroactive increase in the basic allowance has agreed, employees can expect a slightly higher net salary in December. Depending on marital status and income, this will be between 35 and 68 euros. "Pensions are also affected by the increase," reports the United Wage Tax Assistance Association (VLH).

Background: The basic allowance increases retroactively to 1 January 2024 by 180 euros to 11.784 euros for single people and by 360 euros to 23.568 euros for married couplesAs a result, employees had too much income tax deducted in the first eleven months of the year. And they will get this money back.

The retroactive benefit is granted at the Payroll and salary statements for December 2024 implemented. "The increase of 180 euros will be applied all at once – as a result, the net salary in the last month of the year will be higher than in the previous months," says the VLH.

Employers were taken into account: "This procedure for considering retroactive benefits in the wage tax deduction process avoids bureaucratic costs that would arise from changing individual statements and has already proven successful in the past," explains Thuringia's Finance Minister Heike Taubert.

Also retroactive to 1 January 2024, the Child allowance increased by €228 to €6.612. However, this does not directly affect the December billing.

In 2025, the basic allowance will increase by a further €300 to €12.084 (for married couples: by €600 to €24.168), and from 2026 by €252 to €12.336 (for married couples: by €504 to €24.672). The child allowance will increase to €6.672 next year and to €6.828 starting in 2026.

More money for pensioners too

The increase in the basic personal allowance also partially affects retirees, reports the VLH. Pensioners must file a tax return if their total income exceeds the basic personal allowance. Therefore, for 2024, they are only required to file a tax return if their total income exceeds €11.784, and not at the current level of the basic personal allowance of €11.604.

Anyone whose taxable income is below the basic allowance does not have to pay income tax. 

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