Tax-free income

Tax-free income is the tax-exempt portion of income on which income tax does not have to be paid. Separate tax-free income applies to people who are not of retirement age and to people who are of retirement age or reach retirement age during the year.

Change from 2026

From 2026 onwards, the so-called tax threshold will disappear and all employees will have an equal 700 euros per month (8400 euros per year) income tax exemption. Tax-free income will no longer depend on a person’s income and will not decrease as income increases.

For people of retirement age, the tax-free income is 776 euros per month (9312 euros per year).

Tax-free income 2025 (valid until December 31, 2025)

Tax-free income decreases gradually if the salary is higher:

• 654 euros and less → full tax-free income (654 euros)
• 654–2100 euros → tax-free portion decreases gradually (formula: 654 – 654 ÷ 900 × (gross salary – 1200))
• 2100 euros and more → tax-free income is 0 euros (you pay 22% on the entire salary)

Tax threshold

Examples

Gross salary 600 euros: No income tax is paid at all and only employee unemployment insurance of 1.6% and funded pension are withheld, if they have joined it.

Gross salary 1500 euros: The tax-free portion is smaller, 436 euros (formula: 654 – 654 ÷ 900 × (1500 – 1200)).

Gross salary 2500 euros: There is no tax-free income and income tax must be paid on the entire gross salary, from which employee unemployment insurance of 1.6% and funded pension are withheld, if they have joined it.