Calculate the German Progression Clause 2026
How tax-free wage replacements (ALG, parental allowance, sick pay) raise the tax rate on your remaining income — §32b EStG.
Unemployment benefit (ALG I) + parental allowance (Elterngeld) + sick pay + short-time work allowance + insolvency benefit + similar tax-free benefits
Tax Assessment
- Extra Tax Burden
- €1,230
- Effective Tax Rate
- 21.81 %
- Fictitious Rate (used for progression)
- 21.81 %
- Average Rate without Progression
- 18.74 %
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Calculation under §32b EStG
| Position | Amount |
|---|---|
| Taxable Income | €40,000 |
| Wage Replacement (tax-free) | €10,000 |
| Sum (fictitious tax base) | €50,000 |
| Fictitious Tax on Sum | €10,907 |
| Fictitious Tax Rate | 21.81 % |
| Tax without Progression Clause | €7,495 |
| Tax with Progression Clause | €8,725 |
| Extra Tax Burden | €1,230 |
| Effective Rate on Taxable Income | 21.81 % |
Note: Calculation under §32b EStG (2026 tariff, basic allowance €12,096). Wage replacements are themselves tax-free (§3 No. 2 EStG) but raise the tax rate on remaining income. Actual amounts may vary depending on individual assessment.
Background
Progression Clause Germany 2026: How §32b EStG, ALG and Parental Allowance Affect Your Tax
11 Min.