For decades, the “Solidarity Surcharge” (Solidaritätszuschlag), or Soli, was a staple of the German payslip. Originally introduced to fund German reunification, it has been gradually phased out for most. As of 2026, a new wave of tax relief has effectively removed the Soli for the vast majority of skilled expats and middle-income earners.
Combined with an increase in the basic tax-free allowance (Grundfreibetrag), 2026 is looking like a year of significant net-income growth for families.
The Death of the Soli for Middle Earners
In 2026, the exemption threshold for the Soli has been raised significantly.
- Individuals: You only pay Soli if your taxable income exceeds approximately €75,000.
- Married Couples: The threshold doubles to approximately €150,000.
If you earn below these amounts, the 5.5% surcharge on your income tax simply disappears. For a professional earning €70,000, this could mean an extra €50–€100 in your pocket every single month.
2026 Basic Tax-Free Allowance (Grundfreibetrag)
Tax relief isn’t just for high earners. The Grundfreibetrag—the amount of money you can earn before paying any income tax—has risen again for 2026.
- 2026 Allowance: €12,348 (per person).
- Married Couples: €24,696.
This adjustment protects the basic cost of living from inflation, ensuring that a larger portion of your “lower” salary brackets remains untouched by the tax office.
The Net Impact: A Comparison
Let’s look at a typical expat scenario in 2026: a single professional in Steuerklasse 1 earning €65,000 gross.
| Tax Component | 2024/2025 Impact | 2026 Impact |
| Soli Surcharge | Paid in some brackets | €0 (Below threshold) |
| Grundfreibetrag | Lower protection | Higher protection (€12,348) |
| Monthly Net Pay | ~€3,450 | ~€3,580 (Estimated) |
Higher Social Security: The “Counter-Balance”
It is important to note that while income tax is decreasing, social security contributions (Public Health and Pension) are rising slightly in 2026. The income caps (Beitragsbemessungsgrenzen) have moved up. For those earning above €70k, the “Soli savings” might be partially eaten by higher health insurance costs.
What You Should Do
- Check your 2026 Payslip: Ensure your employer has applied the new Steuerfreibetrag.
- Adjust your Steuerklasse: If you are married, 2026 is the year to review the “IV/IV with factor” model to maximize the new allowances.
- Update your Budget: With the Soli gone, divert those “found” euros toward your debt payoff or long-term investments.
The 2026 tax relief is a welcome change, putting more power back into the hands of the skilled workforce that keeps Germany running.
