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Composition of the federal budget – Citizens’ allowance, defense, pensions: This is where your tax money goes

The budget for the 2025 federal budget is almost 500 billion euros. More than a third comes from wage and income tax and solidarity tax, totaling almost 182 billion euros. But what exactly does the taxpayer pay?

This question was addressed by the “ Bild As an example, she cites a single worker who earns 3,000 euros gross per month. In tax bracket I, he pays 3,815 euros in taxes per year. According to Bild, 405 euros of this goes to pension insurance, 178 euros to defense, 145 euros each to the citizen’s allowance and to transport investments, and 81 euros to asylum.

With a monthly salary of 8,000 euros, around 23,000 euros in taxes are due per year, of which 2,447 euros are for pensions, 1,076 euros for defense, 881 euros for citizen’s allowance, the same amount for transport and 489 euros for asylum.

Tax money is used like this

The largest items in the federal budget are, unsurprisingly,…

The exciting thing about Finance Minister Lindner’s draft is that more than 50 billion euros of new debt will have to be taken on. However, since there are secondary budgets (a small digression: these are separate individual pots of money that are filled from various sources, from the federal budget, through loans or through special payments from the economy. They are NOT included in the actual federal budget, which – let’s call it – creates scope for maneuver), the Federal Audit Office estimates the true borrowing at just under 90 billion euros.

The authority is therefore calling for a comprehensive consolidation plan: The strained state of federal finances is presenting the federal government with extraordinary challenges. Structural failures of the past, which are becoming more severe, are encountering new problems,” emphasised the President of the Federal Audit Office, Kay Scheller, as Federal Commissioner for Efficiency in Administration (BWV), on the occasion of the publication of a statement on the preparation of the 2025 federal budget and financial planning up to 2028.

The Court of Auditors sees the problem primarily in the structural Budget problems In view of the interest rate turnaround, a key issue is interest costs, which are now estimated at six percent in the budget. This is dead capital and does not help to tackle important projects such as improving digitalization, education or infrastructure, the authority says.

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