German Income Tax: Solidarity surcharge & church tax
German Income Tax Guide — Chapter: Surcharges
Solidarity Surcharge & Church Tax
Last updated: 27 October 2025
At a glance: The solidarity surcharge (5.5% of income tax) applies only above a statutory free amount with a relief zone; since 2021, about 90% of taxpayers no longer pay Soli. For 2025, the Soli free amount (measured as income tax) is €19,950 for singles and €39,900 for joint filers. Church tax is a surcharge of 8% (Bavaria, Baden-Württemberg) or 9% (other Länder) of income tax for registered members.
Introduction
What the solidarity surcharge is
The solidarity surcharge (Solidaritätszuschlag, “Soli”) is a federal supplementary levy on income tax. After a major reform in 2021 increased the free amount, only higher earners pay Soli in full.
How church tax fits in
Church tax (Kirchensteuer) is a state-level surcharge on income tax, generally collected via payroll or assessment for members of specific religious communities. On capital income, it is withheld automatically if your membership is flagged via the KiStAM system.
Why this matters
Even if your income is taxed at the progressive tariff, the final bill reflects surcharges. Understanding the Soli thresholds and how church tax is collected prevents over- or under-withholding and unpleasant surprises at filing time.
Table of Contents
1) Legal Basis & Key Sources
- Soli thresholds 2025: Federal Ministry of Finance (BMF) overview of 2025 changes; free amount raised to €39,900 (joint) / €19,950 (single) — measured as income tax before surcharges.
- Payroll implementation: 2025 Program Flow Chart (PAP) reflects the new Soli free amount for wage tax withholding.
- Constitutionality: Federal Constitutional Court (26 Mar 2025) upheld the solidarity surcharge.
- KiStAM: BZSt explains automated church tax withholding on capital income (for institutions and individuals).
2) Soli Thresholds in 2025
| Filing status | Free amount (income tax) | Full rate | Notes |
|---|---|---|---|
| Single | €19,950 | 5.5% of income tax | No Soli up to the free amount; relief zone above it |
| Joint (married/partners) | €39,900 | 5.5% of income tax | Thresholds double with joint assessment |
The free amount is not your salary or taxable income — it is your computed income tax figure. Soli is then calculated as 5.5% of that tax (subject to the relief zone rules).
3) Relief Zone (Milderungszone)
Just above the free amount, Soli ramps up gradually rather than jumping to the full 5.5%. This prevents a cliff effect. Payroll and software implement the exact formula; the annual assessment reconciles any differences.
4) Payroll Withholding & Assessment
- PAP mirrors law: Employers withhold Soli only when wage tax exceeds the free amount thresholds per the 2025 PAP.
- Year-end true-up: The tax return recomputes Soli on the final income tax figure; any over/under-withholding is settled on assessment.
5) Capital Income, Soli & KiStAM (Church Tax)
Capital income Soli: Soli of 5.5% applies to the capital income tax withheld (e.g., on dividends/interest at 25%).
Church tax automation: If you are registered as a church member, banks query your KiStAM status with the BZSt and withhold church tax on capital income. You may file a blocking notice (Sperrvermerk) with BZSt to prevent data retrieval; in that case, church tax is handled in the assessment instead.
Because church tax on capital income is treated as deductible in the withholding mechanism, effective withholding rates on capital income are slightly reduced to about 24.51% (9% states) or 24.45% (8% states) instead of 25% before church tax and Soli are added.
6) Church Tax Basics (Rates & States)
- Rate: 8% of income tax in Bavaria & Baden-Württemberg; 9% of income tax in all other federal states.
- Collection: Via payroll and assessment for general income; via KiStAM for capital income withholding.
- Membership-based: Only registered members of collecting religious communities are liable; leaving the church ends future liability prospectively.
7) Illustrative Examples (2025)
Example A — Single just below Soli threshold
Facts: Computed income tax = €19,800.
Result: No Soli due (below the €19,950 free amount).
Example B — Single in the relief zone
Facts: Computed income tax = €21,000.
Result: Soli applies partially per the relief formula (less than 5.5% of €21,000). Payroll handles this automatically; assessment reconciles.
Example C — Joint filers well above thresholds
Facts: Computed income tax = €50,000.
Result: Soli applies at the full 5.5%: €2,750 (before any rounding rules).
Example D — Dividends with church tax (9% state)
Facts: €2,000 dividends; bank has KiStAM match; Sparer-Pauschbetrag already used elsewhere.
Result: Bank withholds capital income tax (effective rate adjusted for church tax), plus Soli on the tax and church tax per KiStAM.
8) Compliance Checklist & Useful Links
- Confirm 2025 Soli thresholds (free amount & relief zone) and apply the correct year’s rules.
- Ensure payroll uses the 2025 PAP; retro changes are reflected in later runs if needed.
- Check your KiStAM status if you are a church member; file a blocking notice if you prefer assessment handling.
- Remember state rates: 8% (BY/BW) vs 9% (other states) of income tax.
- BMF — 2025 changes (Soli free amount to €39,900 joint / €19,950 single): Official page
- 2025 Payroll Program Flow Chart (PAP): BMF PDF
- Soli upheld by Federal Constitutional Court (26 Mar 2025): BMF analysis
- BZSt — Church tax on capital income (institutions): BZSt (institutions)
- BZSt — Church tax on capital income (individuals): BZSt (individuals)
- State rates overview (example official portal): Brandenburg Tax Office
- Effective capital withholding with church tax (24.51% / 24.45%): Kirchensteuer-wirkt explainer
- Consumer explainer on 2025 Soli thresholds: Finanztip
9) FAQ
ℹ️ Click on a question to view the answer:
Who pays the solidarity surcharge in 2025?
Only taxpayers whose annual income tax exceeds the free amount: €19,950 (single) or €39,900 (joint). Above that, Soli phases in via a relief zone and then reaches 5.5% of income tax.
Is the solidarity surcharge constitutional?
Yes. On March 26, 2025, the Federal Constitutional Court upheld the Soli as a permissible supplementary levy.
What are church tax rates and where do they apply?
8% of income tax in Bavaria and Baden-Württemberg; 9% in other federal states. It’s charged only if you are a registered member of a tax-collecting religious community.
How is church tax collected on capital income?
Banks query your church-tax attribute (KiStAM) with the BZSt and withhold church tax automatically. You may file a blocking notice; then church tax is settled via your tax return instead.
Why are some capital withholding rates shown as 24.51% or 24.45%?
Because church tax on capital income is considered in the withholding calculation, the effective 25% rate is reduced slightly to around 24.51% (9% states) or 24.45% (8% states) before adding Soli and church tax.
Does the relief zone mean my Soli jumps suddenly?
No. It phases in gradually above the free amount so that your effective Soli increases smoothly up to the full 5.5%.
I don’t want my bank to know my church status — what can I do?
File a blocking notice (Sperrvermerk) with the BZSt. Your bank will not retrieve KiStAM; church tax is then assessed via your annual return if you are liable.