Change in Lohnsteuer calculation from January 1, 2026

As of January 1, 2026, different rules apply in Germany for calculating the Lohnsteuer (wage tax). Until this year, the calculation of the Lohnsteuer took into account a fixed amount for the deduction of premiums for statutory health insurance and the statutory pension, even if you are not socially insured in Germany.

This fixed deduction (Vorsorgepauschale) has been abolished as of January 1, 2026. In the Lohnsteuer calculation, the deduction is now calculated based on the premiums actually withheld.

For cross-border workers who are socially insured in the Netherlands but are (partially) liable for tax in Germany, this means that more Lohnsteuer is withheld from the gross salary, resulting in a lower net salary.

At this moment, it is not yet clear whether the resulting disadvantage can be compensated via the tax return in Germany for all cross-border workers affected by this

This is a news item from Grenzinfo. View the original news item