Germany agrees on 2027 budget — Der Spiegel

Germany has agreed on its budget for 2027. At the same time, changes to income tax, pension contributions, health insurance and long-term care insurance will affect workers’ net income.

Inflation will not be fully offset

As Der Spiegel reports, inflation will not be fully offset when calculating income tax. The publication released an interactive calculator showing the impact of the reform on the net income of employees insured under the public health insurance system.

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Calculation example

For an employee with an annual pre-tax salary of up to €40,000, no children, and no marriage or registered partnership, the calculator compares figures for 2026 and 2028. With an additional health insurance contribution of 3.1%, the amount of income tax falls from €4,395 to €4,100, or by €295.

Change in social contributions

At the same time, pension contributions in this example rise from €3,720 to €4,060, while long-term care insurance contributions increase from €960 to €1,080. Health insurance contributions remain at €3,540. The overall result for such an employee is minus €165 per year. All amounts in the calculator are rounded to whole euros.