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Do I have to pay tax on my pension?

Despite the basic tax liability of pension payments from statutory pension insurance, there is regularly no tax payment, as numerous allowances - in particular the basic allowance - are higher than the taxable portion of the pension. The basic tax-free allowance is €9,408 in 2020, €9,744 in 2021 and €10,347 in 2022. The amounts are doubled for jointly assessed spouses/registered partners.

The vast majority of pensioners do not have to pay tax on their pension because a certain percentage of the pension is tax-free. If the pension started in 2005 or earlier, only 50 percent of the pension payments are taxable. The percentage of the taxable portion increases by two percentage points for each new pension year until 2020, and by one percentage point for each year from 2021 onwards, so that 100 percent of the pension is taxable when it begins in 2040.

As a rule, a tax liability currently arises if there is other income (e.g. rental income, remuneration for secondary employment, spouse's salary income) or if a widow's pension is drawn in addition to one's own pension.

Note

You can also find information on the Retirement Income Act in the "Tax tips for senior citizens".

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