Pension benefits were taxable at 68 % in 2023

Of the pension benefits paid in 2023, 68 % were subject to tax, even though not every pensioner exceeds the basic tax-free allowance and actually has to pay income tax.

In 2023, around 22.1 million people received benefits amounting to 381 billion euros from statutory, private or occupational pensions. According to the Federal Statistical Office, this was 121,000 more pension recipients than in the previous year. The amount of pensions paid rose by 4.9 % in the same period. Of these pension benefits, 68 % counted as taxable income in 2023 (260.5 billion euros). The average tax rate has thus risen by 13 percentage points since 2015. The reason for the increase in the proportion of taxable income is the new regulation of the taxation of retirement income in the Retirement Income Act of 2005. It is not yet known how many pensioners will actually have to pay income tax for 2023 due to the long deadlines for tax assessment. The most recent data is available for 2020, when around 40 % of the 21.8 million pension recipients at the time had to pay income tax on their pension income.