In principal: The first 100 Euro are always tax-free.

In addition, an exemption for gainful employment is deducted for employed persons. 20% of the monthly gross income between 100 and 1000 euros (inclusive) is exempt from tax.  10% of a further gross income of up to 1,200 euros per month are still tax-exempt. For employees with children, the limit is 1,500 euros.

For example, the following exemptions apply:

Gross Income

Tax-free Amount

100 Euro

100 Euro

200 Euro

120 Euro

400 Euro

160 Euro

800 Euro

240 Euro

1.000 Euro

280 Euro

1.200 Euro

300 Euro

1.500 Euro (with a child)

330 Euro

 

In addition, according to § 11b paragraph 2 SGB II, further amounts can be deducted for income with earnings exceeding € 400 in the event that necessary employment expenses exceed € 100. The Arbeitslosengeld II Ordinance (AlgIIV) provides for some of the deduction amounts, e.g. flat-rate commute expenses. Accordingly, income is deductible:

  • The taxes and social security contributions paid on income in full,
  • The contributions to statutory public or private insurance (e.g., motor vehicle liability insurance) in the amount of actual expenses,
  • The contributions to public or private insurance which are not required by law, but are proportionate to the amount and amount of the pension (a lump sum of 30 euros per month), contributions to the “Riester-Rente” Pursuant to section 86 of the Income Tax Act, and
  • The necessary expenditures related to the gain of the income (“advertising costs”). An amount of EUR 15.33 (one-sixtyth of the tax-related advertising costs) is deductible on a monthly basis. Higher expenditure can be taken into account. In addition, the travel costs for public transport are deductible. For your own car / motorbike an amount of 0,20 Euro is deductible for each distance of the shortest connection. This does not apply if travel by bus or train are significantly cheaper.

Section 11b SGB II