Germany 2027 Pay Changes: Mindestlohn €14.60, Tax Cut and Your Netto

Steuerklasse I, no children, no Kirchensteuer, statutory health insurance at a 2.9% Zusatzbeitrag in both years. PayMetric Labs' own modelled estimate:

Two changes reach almost every employee. The Grundfreibetrag, the income you keep tax-free, rises by €216 to €12,564, and the Arbeitnehmer-Pauschbetrag, the flat work-expenses deduction built into Lohnsteuer, rises by €200 to €1,430. Payroll applies both automatically from January; you don't have to claim anything.

The tariff above that also moves. The 42% rate starts at €70,601 instead of €69,879, which trims tax in the middle. At the top it goes the other way: the 45% rate starts at €250,000 instead of €277,826, and a new 47% rate applies above €280,000 of taxable income. The Bundesfinanzministerium puts the total relief at about €10 billion, aimed mainly at families and low and middle incomes, with Kindergeld rising to €267 a month.

Two caveats. The bill is a government draft, adopted by the cabinet on 2 September and now in the Bundestag. And the Grundfreibetrag is set provisionally, pending the 16th Existenzminimumbericht due this autumn, so it could still move by a few euros.

Social insurance contributions stop at a ceiling, the Beitragsbemessungsgrenze. Each year it follows wage growth, and in 2027 it jumps: to €76,500 for health and care insurance (from €69,750) and €106,200 for pension and unemployment insurance (from €101,400). Separately, the Versicherungspflichtgrenze, the pay you need to leave statutory health insurance, rises from €77,400 to €84,150, including an extra €300 added for political reasons on top of the usual formula.

Below €69,750 none of this matters. Above it, every euro up to the new ceiling now carries about 10.6% in health and care contributions (11.2% if you're childless), and above €101,400 another 10.6% for pension and unemployment. That outweighs the tax cut from about €71,900. At €110,000 the net change is -€495 a year. The pension contributions aren't lost: they earn you more Entgeltpunkte.

The Mindestlohn of €14.60 is certain: the cabinet set both the 2026 and 2027 steps by regulation, following the Mindestlohnkommission. Full time at 40 hours a week, gross pay goes from about €2,409.33 to €2,530.67 a month. Combined with the tax cut, that's about €935 more Netto a year for a single worker without children.

The Minijob limit follows automatically, to €633 a month, so a Minijobber can keep working about ten hours a week at the new rate. If you have Minijob staff on a fixed monthly amount, check their hours: €603 at €14.60 is only about 41 hours a month. The Midijob band starts above €633 and still ends at €2,000. Our Midijob calculator shows the reduced contributions in that band.

Your health insurance rate is 14.6% plus your fund's Zusatzbeitrag, split with your employer. The official average for 2027 is published in November, after the GKV Schätzerkreis meets in October. The government's stated aim after this year's GKV savings law is to keep it at 2.9%, but each Krankenkasse sets its own rate, and many already charge more.

For a sense of scale: each 0.1 point costs you about €27 a year on €4,500 a month. If your fund announces a rise for January, enter both rates in the calculator above. A rise also gives you a special right to switch funds (Sonderkündigungsrecht).