Christian Lindner promised tax relief, but high earners could pay more next year due to rising social security contributions.
The basic tax allowance and the child tax allowance are to be increased and the so-called “cold progression” is to be offset. With these announcements, Christian Lindner had already given taxpayers hope of noticeable relief in the middle of the year. They should have to pay a total of 23 billion euros less to the state by 2026. Now these announcements could turn out to be obsolete for upper income groups.
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As the “Bild” newspaper reports, a draft regulation from the Ministry of Labor shows that next year, social security contributions for high earners are to rise significantly due to an increase in the contribution assessment limit. As usual, this limit is adjusted every year in view of the development of income in Germany – this year, however, the increase is particularly high. According to “Bild”, a ministry spokesperson attributed the amount of the adjustments to the “very good wage development of 6.44 percent across Germany last year”. As a result, the contribution assessment limits in 2025 rose “comparatively sharply”.
High earners are asked to pay
According to the report, contributions to the statutory pension insurance scheme will be due in the future for monthly incomes of up to 8050 euros. The current figure is significantly lower. In addition, a distinction is currently being made between old and new federal states: in the west, the contribution assessment limit is 7550 euros, while in the east it is 7450 euros per month. This distinction is now to be eliminated. Those who earn more only pay contributions to pension, health, nursing and unemployment insurance up to this limit – no contributions are due on incomes above this limit.
The contribution assessment limit for statutory health and nursing care insurance is also to rise to 5,512.50 euros. High earners currently have to pay contributions on income of up to 5,175 euros per month. According to the Ministry of Labor, the draft has been submitted to interdepartmental coordination within the government.
For the “”, financial scientist Frank Hechtner from the University of Erlangen-Nuremberg explains which income groups will have to pay higher social security contributions next year. People with an income of 5200 euros a month only have to prepare for 31 euros more per year. For higher salaries such as 5500 or 8100+ euros a month, the additional contributions of 408 or 1059 euros per year are much more noticeable.
Goodbye tax relief?
For example, anyone who was just happy about the increase in the basic income tax allowance, up to which income remains tax-free, could start to worry about the higher social spending. After all, top earners, who are the target of an increase in the contribution assessment limit, could have less money at their disposal at the end of the month.
Prof. Dr. Frank Hechtner also makes calculations on this question. Based on the example of a single person without children, the scientist finds that with an income of 5,000 euros a month, you can still look forward to a relief of 163 euros. The situation is different again with a salary of 5,500 euros. In this case, there is 79 euros less in the account per month than before the increases. Contrary to intuition after the first two calculation examples, people with an income of 7,500 euros a month will receive a relief of 225 euros. The reason for this is that the tax advantages dominate initially with higher incomes. However, this effect reaches its limits at 8,000 euros a month. Then, the bottom line is that you already have 111 euros less in your pocket per month. From 15,000 euros, it is a full 349 euros.
Social security contributions could rise further
The latest announcements to increase social security contributions have already met with mixed opinions. The President of the Taxpayers’ Association, Reiner Holznagel, told the “Handelsblatt” that for many people this would be like a tax increase through the back door. The German Social Association (SoVD), on the other hand, welcomes the federal government’s plans. The annual adjustment of the contribution assessment limit is a necessary step to stabilize the contribution-financed social insurance, said SoVD Chairwoman Michaela Engelmeier in an interview with the “Neue Osnabrücker Zeitung”. “Because higher contribution assessment limits mean that higher incomes contribute more to the financing in order to distribute the burden more fairly and to relieve lower and middle incomes.”
Just in June, a study showed that employees and employers could face sharp increases in social security contributions in the future. By 2035, contributions for the various insurance branches could rise by a total of 7.5 points to 48.6 percent. The Berlin-based IGES Institute had calculated the development of contributions for pension, health, nursing and unemployment insurance on behalf of DAK-Gesundheit, which seems obvious from today’s perspective.
Source: Stern
