Last year, around 22.5 million people in Germany received benefits from statutory, private or occupational pension schemes, which was 0.8% more than in the previous year, the Federal Statistical Office announced on Tuesday.
According to the figures, a total of around €423 billion ($487 billion) was paid out. Compared with the previous year, this represents an increase of 5.1%, or €20.7 billion.
Around 72% of the benefits – totalling €304 billion – were classified as taxable income in 2025. Since 2015, the average tax rate has thus risen by 16.4 percentage points.
The reason for this is the taxation rules introduced by Germany’s Retirement Income Act of 2005, which regulated the transition from upfront to deferred taxation.
This means that pension contributions are gradually made tax-free during the accumulation phase, and it is only the payouts that are taxed. This transition will continue until 2058.
In 2022, around 42% of pensioners paid income tax
“For many pensioners, the taxable portion of their pensions, after relevant deductions, falls below the annual basic allowance. Many pension payments remain tax-free if there is no other income,” the statisticians said in their report.
According to the data, around 80% of pensioners liable for tax also had other sources of income, such as employment or rental income.
Pension recipients also include surviving spouses and children.
Source: dpa
