A new year can only mean one thing: a lot of new laws! In 2021, there were many changes in Germany. Let's take a look at what will happen to the life of German immigrants in 2021?
Increase in tax exemption
As part of the government's major tax reform, German employees can expect significant tax breaks by 2021. As usual, the basic tax exemption (i.e. the part of personal income that does not require tax payment) will increase in 2021, from 9408 euros per year to 9.744 euros.
Minimum wage increase
Germany's minimum wage will also rise again in January - from 9.35 euros per hour to 9,50 euros. But it's not a place for the rise and fall: as part of the gradual plan, the minimum wage will be raised to 10,45 euros per hour by 2022 and three more by 2021, bringing more than 1.3 billion euros of wage growth to workers.
Scrap solidarity surcharge
For workers, more good news is that the solidarity surcharge (solarit? Tszuschlag or soli) was introduced in the 1990s to unify the cost, the much opposed tax supplement, which is expected to be cancelled to most taxpayers in january2021.
In short, the "soli threshold" will be greatly raised, where there is no solidarity surcharge to be paid so that parents with two or more children can only pay for a total annual income of 151.000 euros. Single taxpayers must earn more than 61.700 euros in responsibility.
Increase of uniform commute rate
Those who commute from work (not those with a lot of commutes in 2020) can also expect economic relief in 2021. Germany is making some changes to its pendlerbauschale, which is considered to be a work related expense that you can deduct from your income in the annual tax return.
To offset the rising costs of fuel and car taxes (more information below), the allowance for people who regularly commute and work more than 21 km will increase to 35 cents per kilometer, starting on 1 January 2021. It will increase again to 38 cents per kilometer by 2024.
5 Euro per day home office tax refund
To offset the additional costs of operating the "home office," the German government will provide new tax benefits from 2021. Anyone who works at home in 2020 can claim a maximum of five euros of tax relief per working day, up to 600 euros per year.