Are you thinking about moving to Germany for a better job this year? Coming to Germany as a skilled worker can be very good for your money in 2026. The German government has made new tax rules to bring more talented people from other countries. This helps fix the big problem of not enough skilled workers, called Fachkräftemangel. There are special tax breaks for new people, higher amounts you do not pay tax on, and better rules for travel to work. Here is everything you need to know in simple words to get more money in your pocket in 2026.
The 2026 Foreign Worker Tax Rebate (The 30/20/10 Rule)
The biggest new thing in 2026 is a special tax break for skilled workers who just came to Germany. The government wants to make Germany better than other countries like the Netherlands for attracting talent. So, they give a tax rebate on your salary for the first three years.
How it Works
If you qualify, you get a part of your gross salary tax-free for three years.
- Year 1: 30% tax rebate. This means 30% of your salary is not taxed.
- Year 2: 20% tax rebate.
- Year 3: 10% tax rebate.
This rebate lowers the tax you pay a lot in the beginning. It makes your take-home pay much higher when you start your new life in Germany.
Who Can Get It
This help is for “newly arrived” workers. You must not have been a tax resident in Germany for the last five years. If you lived and paid taxes here before, you may not get it. It is made for people coming fresh to work in Germany.
Income Limits
The rebate works best for salaries between about €41,000 and €500,000 per year. This focuses on skilled middle and high earners. It stops low-wage jobs from getting the same benefit and keeps things fair.
Many news sources say the government planned this rebate to fight the worker shortage. It started as a proposal in 2024 and is now part of the rules in 2026. This makes Germany more attractive for experts from around the world.
Higher Tax-Free Allowances (Grundfreibetrag)
Even if you are not new, 2026 gives everyone more money without tax. The Grundfreibetrag is the basic amount you earn before paying any income tax. The government raised it because of higher prices (inflation).
- The 2026 Amount In 2026, the tax-free limit is €12,348 per year for one person. You pay 0% income tax on the first €12,348 you earn. For married couples who file taxes together, it doubles to €24,696. This is like free money because the government does not take tax from this part. This change helps all workers. You keep more of your salary without doing anything extra. It is automatic in your paycheck.
- The “Soli” Exemption The Solidarity Surcharge, or Soli, is an extra 5.5% tax on your income tax. In 2026, most people do not pay it anymore. Single people only pay Soli if their taxable income is over about €75,000. For lower and middle earners, this tax is gone. This saves more money for normal workers.
These higher limits and no Soli for many make life easier in Germany. Everyone benefits, not just new arrivals.
Also Read: Netherlands Logistics Companies: Employer Compliance Inspection Updates for 2026
Upgraded Commuter Perks & Mobility Premiums
If you live outside the city and travel to work in big places like Munich, Berlin, or Frankfurt, 2026 has good news. The rules for deducting travel costs are much better now.
- Pendlerpauschale (38 cents/km) The commuter allowance, called Pendlerpauschale, is now 38 cents for each kilometer from the very first kilometer. Before, the higher rate of 38 cents started only after 21 kilometers. Now, it applies right from kilometer one. This works for any way you travel: car, train, bus, or even bicycle. The distance is the short way between home and work.
- How Much You Can Save If you commute 25 km one way and work five days a week, you can deduct a lot more now. This change can give you €130 to €180 extra in tax savings each year. For longer distances, the savings are even bigger.
This helps people who live in suburbs or smaller towns but work in cities. It makes commuting cheaper after tax. The government made this change to be fairer for people in the countryside.
Visa-Linked Financial Milestones
Your tax benefits often connect to your visa or residence permit. In 2026, the salary rules for key visas are updated. These thresholds decide if you can get the visa easily.
Here are the main ones:
- EU Blue Card (Standard): Minimum gross salary €50,700 per year. This visa gives fast track to permanent residency in 21–27 months.
- Shortage Occupations: Minimum gross salary €45,934 per year. This is lower for jobs like IT, doctors, and engineers where Germany needs more people.
- Professional Experience Visa: Minimum gross salary €45,630 per year. You do not need a degree if you have two or more years of experience.
These lower thresholds for important jobs make it easier to come and work.
Electric Vehicle Bonus
If your company gives you a car, electric vehicles are very good in 2026. The tax on company cars is only 0.25% if the car is electric, and now the price limit is up to €100,000. This means even expensive electric cars can be a low-tax benefit for managers and senior workers.
2026 Strategy Tip for Expats
Do not forget to file your tax return! Many employees think it is not needed, but almost 90% of expats get money back. In 2026, with higher Grundfreibetrag and the new commuter rule, your refund can be bigger than before. You can also deduct costs like moving to Germany, German language classes, and home office things as work expenses.
Filing can give you hundreds or thousands of euros back. It is worth the time.
In total, 2026 has many good tax changes for skilled workers in Germany. New people get big rebates, everyone gets higher tax-free amounts, commuting is better, and visas are linked to good salaries. These perks help you earn more and live better.
Disclaimer: This article is for information and learning only. Please check official sources before you decide anything. Tax rules can change, so talk to a tax expert or the German tax office for your case.