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Pension tax for a pension of 1,600 euros: calculation and allowances
Everything about taxes with a pension of 1,600 euros - Calculate your tax burden and find out about tax allowances and reforms. Find out more now!
Pension tax for a pension of 1,600 euros: calculation and allowances
A pension of 1,600 euros is subject to tax in Germany. The amount of taxes that are deducted from a gross monthly pension of 1,600 euros depends on various factors, including the basic tax allowance and the pension allowance. The pension allowance depends on the year in which you retire and is expected to fall to zero by 2040, which means that from this point on the entire pension will have to be taxed.
The basic tax allowance for 2022 has been increased to 10,347 euros and applies to both single people and married couples. According to a ruling by the Federal Finance Court, the reform of the tax formula for pensions is planned in order to avoid double taxation. A pension of 1,600 euros per month is subject to progressive taxation, with the tax rate increasing with the amount of pension payments.
A calculation example shows that with a pension of 1,600 euros per month, 80 percent of the pension is taxable. After deducting pension allowances and other costs, the taxable portion ultimately amounts to 13,120 euros. The income tax due on this amount can be found in the basic income tax table. It is recommended that you seek personal pension advice as the tax burden on pensioners increases year on year.