German Pension Tax: Taxable Share and Living Abroad

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A German pension is taxable income, but only a share of it, and that share depends on the year your pension starts. Whether you actually pay tax depends on your total income: in 2026 the first €12,348 of taxable income are tax-free for a single person living in Germany. To see what your income adds up to, use the income tax calculator, and for the filing itself the German tax return guide.

How much of your pension is taxed

The rule is part of a long switch that began in 2005: contributions are gradually freed from tax while you work, and pensions are taxed instead when you receive them. The same table applies to pensions from professional pension funds and to the Rürup pension.

Example: your pension starts in 2026 at €1,500 a month, or €18,000 a year. 84% of it, €15,120, is taxable, and €2,880 stays tax-free. From 2027 that €2,880 stays fixed. Regular yearly increases do not change it, so each increase is fully taxable. Only other changes to the pension amount lead to a recalculation. Pensions from subsidized contracts, such as Riester contracts and occupational pensions in pension funds, Pensionskassen and direct insurances, are taxed in full as far as they come from tax-favored contributions.

If you live abroad

Moving away does not end German tax on a German pension. If you neither live in Germany nor stay here for more than 183 days a year, you are subject to limited tax liability (beschränkte Steuerpflicht) on your German pension. One tax office handles everyone in that situation who receives only pensions from Germany: the Finanzamt Neubrandenburg, its department for pensioners abroad (RiA). If you have other German income, a different tax office may be responsible.

Limited tax liability is usually more expensive. The basic allowance does not apply, so tax is due from the first euro of taxable pension. Most personal reliefs are lost too, among them joint assessment with your spouse, extraordinary expenses and the allowances for children. At least the standard deduction for pension income is granted.

Unlimited liability on application. You can ask to be taxed like a resident if at least 90% of your income is subject to German tax, or if your income not taxed in Germany does not exceed the basic allowance, which is reduced for some countries. You need a certificate from the tax authority in your country of residence showing your foreign income, even if it is zero. You then receive the basic allowance and personal reliefs again, while your foreign income raises the tax rate on your German income.

No tax return needed. Pensioners abroad must in principle file a German tax return. The Finanzamt Neubrandenburg waives it if you tell it so on its reply form. It then assesses the tax from the data the pension insurance reports and sends you the bill. File a return only if you want to claim expenses. Treatment as a resident can also be requested on the reply form, together with the certificate from your country of residence.

Which country taxes: the tax treaty

Tax treaties decide which country may tax a pension when you live in one country and the pension comes from another. Check the treaty between Germany and your new country before you move. One example: under the treaty with the USA, social security pensions are taxable only in the country where the recipient lives, so a German pension paid to someone living in the US is taxed only there (see Germany vs. the US).

Bottom line

Look up your start year to see how much of your pension is taxable. Moving abroad, decide early whether to apply for treatment as a resident, and check what the tax treaty with your new country says about German pensions.

Part of the German pension system. Related: leaving Germany · taxes in Germany · retirement age.

Frequently Asked Questions