SOCIAL SECURITY
The minijob threshold increases from €450 per month to €538 per month.
The transitional area between the minijob threshold and compulsory insurance increases from €450.01 to €850 per month to €538.01 to €2,000 per month.
Contribution assessment limits in social security also increase. In unemployment insurance, the contribution assessment limit increases from €82,500 per year to €85,200 per year. In health insurance, the contribution assessment limit for employees increases from €58,250 per year to €60,500 per year. In the pension insurance, the contribution assessment limit for employees increases from €82,500 per year to €85,200 per year and for self-employed persons from €71,500 per year to €74,400 per year.
INCOME TAX
The basic tax free income increases from €10,908 to €11,604.
The child tax free allowance increases from €3,192 to €3,350.
The marginal tax rates are increased by 6.3%. The top marginal tax rate of 42% is levied on taxable income of €66,761 or more.
IMPACT
The changes in social security and payroll tax have a positive impact on employees. By increasing the minijob threshold and the transitional area, more employees can benefit from insurance exemption. The increase in contribution assessment limits means that employees keep more of their income. The increase in the basic allowance and the child allowance leads to a lower tax burden.
Overall, the changes lead to a relief for employees.