Parental allowance: How to reduce income when you earn too much

“Are we coming with our income over 175,000 euros?” Tax advisor Kim Knopf from the tax advice “Taxitsmart” from Bad Schönborn has been hearing this question more often.

Since April 2025, the new income limit of 175,000 euros has been in effect for expectant parents. By March 2024, the limit was still 300,000 euros; Those who were below received the state family performance. In April 2024, the income limit was reduced to 200,000 euros – now it continues to drop. At first glance, it is not so easy to recognize whether you are lying above or below.

“The taxable income is not the same as gross or net income,” says tax consultant Kim Knopf. “The total amount of all income of the respective year counts. These are shortened, among other things, to provide pension expenses, special expenses, individual allowances and extraordinary burdens.”

The more can be stopped, the sooner the income limit for parental allowance is not reached. In order to receive financial help, it can therefore be worthwhile to adapt the income in some cases.

Marina Zubrod reports of this. The multi-entrepreneur and her husband Jan Zubrod have a mixed income from her salaries, rental income and leases. To keep an overview, they visited parental allowance two years ago – before the birth of their first child. “We were advised to temporarily lower our salaries and to award loans to our companies,” reports the entrepreneur. In this way, the couple was able to reduce their income.

“Such measures are absolutely useful in individual cases, but must be checked in advance legally and tax law,” says Kim Knopf. In this way, one could optimally use tax design rooms.

For the self -employed, there are a number of ways to reduce income: If necessary, invoices can be made later in order to generate the income until the following year. However, it must be checked whether or in what amount the parental allowance is reduced on the basis of this if the income falls during the period of parental allowance.

Expenditures can also be increased – for example by investing. “Compared to employees, self -employed people have an advantage here, since they are often available to have more design options. From the perspective of employees, this is of course a point of criticism,” says Kim Knopf. The use of the investment deduction amount is very effective here. “Under certain conditions, the depreciation for investments, which, for example, only occur in 2026, can be asserted, some of which is already up to 50 percent in 2025.

For shareholders and managing directors who, like Marina and Jan Zurbrod, can adapt their salary or forgive loans, it is important to contractually record salary adjustment and other measures in the course of the calendar year before birth. “It is not enough to pay less,” warns tax consultant Kim Knopf.

It is more difficult for employees to lower income, but here too there is scope. “If you receive a bonus, you can discuss with the employer whether bonuses and special payments can only be paid out in the following year. A contractual review is always required,” says Kim Knopf.

Another option is to temporarily pay additional pension contributions, since they also reduce the taxable income. “There are also other options within the framework of retirement provision, such as Rürup or Riester,” says Knopf.

Even if things are pending in the household such as renovation work, they can be settled proportionately, as well as donations or childcare costs.

For married couples, the tax advisor still has an extra tip to obtain more parental allowance if you do not claim the maximum due to the net content: If you are within the framework of the income limit, it can make sense that the person who goes to parental leave changes to tax class III. The reason: In tax class III, the monthly net income is higher, which in turn raises the calculation basis for parental allowance.

The average monthly net income of the past twelve months before birth is used to calculate the exact amount that is due to the parent’s parental period. Between 65 percent and 67 percent of the net service are replaced; Up to 100 percent can be replaced in the case of very low incomes. Upwards, the classic parental allowance is capped to 1800 euros a month. If the tax classes change, the other person would then switch to tax class V and thus pay more taxes every month. At the age of year, the net service changes, since the monthly tax payments are only advance payments, the compensation and thus the exact calculation of the tax burden is made with the creation of the income tax return.

Does it make sense to deliberately reduce income in order to maintain parental allowance? According to Kim Knopf, the individual individual case always depends. “Of course, it is nonsense to reduce working hours or to do without possible price gains in capital investments just because you want to reduce your income. To ensure that the decline in income is not higher than the later parental allowance payment. Advice practice often with this topic. “

Many couples also underestimate the expenses they can sell. “Those who generate rental income do not automatically increase their taxable income,” says Kim Knopf. Of course, this is the goal of renting real estate in the long term. However, it could also be briefly that a loss can be set by renovation work, loans and maintenance costs. If the loss then falls into the calendar year before the child was born, it has a positive effect when calculating the parental allowance limit. “In addition, the question arises as to what options there are to earn something in addition to the normal job without increasing the taxable income. For example, up to 3000 euros a year is tax-free as part of the volunteer and exercise flat rate,” says Kim Knopf. Sometimes it is also worth it financially to continue working. “With all the paperwork that you have to process parental allowance for 1800 euros, I prefer to earn the money in,” says entrepreneur Marina Zubrod.

For couples who are not entitled to parental allowance, parental leave can become a great financial burden. Without parental allowance, parental leave will be undertaken, as in the case of Katharina Löscher* and her partner. With a gross content of 80,000 euros each and additional rental income of around 25,000 euros, the two are just above the income limit for parental allowance and do not fall below this limit even with all deduction options. At the moment, the two Munich residents are still childless – but the prospect of the considerable financial burden does not make the decision for children easier. “If I suddenly don’t get anything instead of 3800 euros a month, it is already violent,” says Katharina Löscher.

“There is no sliding zone here – there is a hard cut in parental allowance. I lie above the border. There would be no possibility to adapt the parental allowance limit as a so -called” sliding transition “: the more the limit is exceeded, the less the part of the parental allowance will be paid. A little exceed, “says Kim Knopf.

Another problem is the high cost of living in some cities: “This calculation does not include how expensive the rent in some cities is easy,” says Katharina Löscher. For a three -room apartment like hers, which is not overly large for a couple with a child, you already pay well over 2000 euros in Munich. “For people in big cities that fall over the 175,000 euros – precisely because the salaries are adapted to the city’s cost of living – it will be really scarce,” said Katharina Löscher. Tax advisor Kim Knopf also sees this point critical. In the city center of Munich, there are completely different costs than in the country. The question of how many children have a couple also does not play a role in the question of parental allowance.

The following can be a career kink, pension differences and a further enlargement of the gender pay gaps. “I think it’s a shame that the question of who takes over childcare is inevitably a financial decision for many. There are many other important aspects that should play a role in this decision,” says Kim Knopf.

In the end, the content of how to split up the care decides is to fear that one of the partners withdraws from educational work, while the other person has to carry the entire load. Not only the salaries of the partners are becoming more and more different, but also the living environments in which partners act.

*The name has been changed at the request of those affected, but is known to the editorial team.