Retroactive calculations will probably be used again in the December payroll this year, if the federal government passes the law on the tax exemption of the minimum subsistence level this year.
The basic tax-free amount and the tax-free amount for children will be increased retroactively for 2024, as the minimum subsistence level has risen more than expected.
Planned increase
- The basic allowance for 2024 will be increased retroactively from €11.604 to €11.784.
- This is an increase of €180.
- For married couples, the basic tax-free amount would double to €23.568 .
Timetable and implementation
- The increase will apply retroactively from 1 January 2024.
- It will be taken into account for payroll tax purposes in December 2024 .
- Employees would then receive between €30 and €75 more net in their December payroll, depending on their salary level .
The background
- The adjustment is due to a higher-than-projected increase in the minimum living wage.
- The aim is to ensure that the minimum subsistence income will remain tax-free until 2024 .
- The bill still has to go through the legislative process .
Other planned increases
- An increase in the basic tax-free amount to €12.084 is planned for 2025.
- A further increase to €12.336 is planned for 2026.
- These adjustments are part of the government’s efforts to mitigate the effects of cold progression .
Please note
- As the annual income tax equalisation must also be carried out in December, some recalculations may result in higher tax refunds than would normally be the case!
