Older people should voluntarily work longer. The so-called active pension has been in effect since the beginning of 2026, with tax-free additional income of up to 2,000 euros per month possible.
To ensure that more people in old age continue to work voluntarily, the government has come up with a tax bonus that can be used since the beginning of 2026. The name is somewhat misleading because the so-called “active pension” is not a new payment from the pension insurance. The term stands for a model in which pensioners up to 2,000 euros tax-free can earn extra money per month.
That sounds good and you can save a pretty penny a year 24,000 euros tax-free receive. Pensioners have already been allowed to do so earn unlimited additional moneywithout the pension being reduced. But the additional income still had to be taxed as normal. That has changed with the active pension since the beginning of the year; there is now a monthly allowance of 2,000 euros, which is tax-exempt.
These rules apply to active pensions
According to the German Institute for Economic Research could directly benefit from the active pension 230,000 working pensioners benefit, especially higher earners. The federal government assumes 168,000 employees will benefit from the active pension.
According to initial estimates, the state should collect around 800 million euros less in taxes; currently it is estimated at just under 890 million euros. Only if noticeably more pensioners continue to work could this deficit be offset. That is exactly the bet the government is making with active pensions. These rules apply:
- Pensioners are allowed to earn up to 2,000 per month in addition to their pension tax-free
- This is possible for pensioners who have reached the standard retirement age
- Every euro earned beyond this must be taxed.
- The regulation only applies to employment subject to social insurance contributions, i.e. not to mini-jobs
- The self-employed, freelancers, farmers and foresters and civil servants are excluded from the active pension.
- The tax-free earnings are not subject to the progression proviso, so they do not increase the tax rate for the remaining income.
- But tax-free does not mean exempt from social security contributions; Contributions to health and nursing care insurance are withheld from the salary. However, active pensioners do not have to pay contributions to pension and unemployment insurance, only the employer has to pay their share.
Even if you exhaust your active pension, you will not receive a full 2,000 euros, but only just under 1,800 euros. With the Active pension calculator You can check how high the net amount of your active pension really is.
No application for active pension necessary
The active pension was decided surprisingly quickly and was only approved at the last meeting of the Federal Council shortly before Christmas. It started just a few days later, at the turn of the year 2025/2026.
No application is necessary to claim the active pension. Rather, the regulation is automatically taken into account in the employer’s wage tax deduction criteria and the salary is therefore not taxed up to the 2,000 euro exemption limit.
There is no upper age limit for active pensions. However, they cannot be divided into several activities. The active pension only applies to employment relationships subject to social insurance contributions.
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