Germany Offers €2,000 Monthly Tax Relief to Working Retirees

The German government announced a tax exemption of €2,000 per month for retirees who continue working, taking effect on 1 January 2026. The relief applies to earnings from employment, not to pension income.

The measure aims to help firms retain experienced staff and counteract a shrinking labour force as more citizens reach retirement age. Civil servants and workers in mini‑jobs—jobs limited to 70 days a year with wages of €556 or less per month—are excluded.

Labour Minister Barbel Bas expects the policy to revive Germany’s economy, which has contracted for two consecutive years, with a projected growth of 0.1 % in 2025‑2026. It could influence labour participation rates and reduce future public health spending for retirees.