The planned tax relief could mean a higher net salary for around 22 million employees. © Panthermedia/Imago, CHROMORANGE/Imago; Collage: RUHR24
From 2025, a number of employees will be blessed with tax relief. At the same time, social security contributions for higher earners will probably increase.
Dortmund – Many employees are regularly disillusioned when they look at their pay slips. For some, the net salary is so low that they are considered “poor”. In the coming year, the situation could at least improve somewhat for several million people.
Change in net salary from 2025: 22 million citizens will get more money
The federal government is planning extensive changes to the tax and social security system for 2025. While, on the one hand, tax relief is provided through the elimination of cold progression (see list point 1 for an explanation), on the other hand, the contribution assessment limits for social security contributions will be raised.
These opposing measures lead to different effects on employees’ net salaries – depending on their income level. The following changes will occur in detail:
- Breakdown of cold progression: Finance Minister Christian Lindner has long been planning tax relief for millions of citizens in order to reduce the cold progression. It arises when wage increases are eaten up by inflation, but employees still face a higher tax rate. As a result, purchasing power decreases despite salary increases. The reduction of the cold progression is intended to compensate for this effect.
- Increase in contribution assessment limits: Die Frankfurter Rundschau is based on a draft from the Federal Ministry of Labor and Social Affairs and provides concrete figures. Pension insurance: from 7,550 euros (West) or 7,450 euros (East) to a uniform 8,050 euros per month. Health and nursing care insurance: from 5,175 euros to 5,512.50 euros per month. Social security contributions will then be calculated and paid up to these new limits.
- Possible increase in health insurance contributions: General and reduced contribution rates are determined by the legislature. The health insurance companies also determine the amount of the individual additional contribution. The latter could rise by up to 0.75 percentage points next year – and thus ensure a record contribution to health insurance companies.
- Expected increase in nursing care insurance contributions: Determined by the legislature. Here, according to information, the Welt an increase of 0.2 percentage points is expected.
Planned tax relief is intended to ensure higher net salaries for millions of employees
The combination of tax relief and higher social security contributions leads to different effects. According to calculations by the taxpayers’ association, single employees have: Welt The following changes to the net salary are available:
Net salaries could increase for almost 22 million people from 2025
When you look at the numbers, it becomes clear that high earners in particular have to expect additional burdens. According to the Federal Statistical Office, the average gross monthly earnings of full-time employees in Germany was 4,323 euros in April 2023 (more financial topics at RUHR24).
The federal government’s planned tax relief could have a positive impact on the net salaries of several million citizens. However, not everyone benefits. © Schöning/Imago
Almost 80 percent of all full-time employees achieved gross monthly earnings of less than 5,500 euros during this period and would therefore benefit. With around 27.2 million full-time employees (as of August 2022), around 22 million people can look forward to a higher net salary.
