How to save money in Germany

This guide shows real ways to save money in Germany.

Taxes and social contributions

Most employees pay 35% to 50% of their income in taxes, health insurance and pension contributions. There are ways to pay less.

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Health insurance

Your private health insurance costs per month.

Public pension

Public pension insurance pays for your pension when you retire.

Your employer pays

You pay

Unemployment insurance

Unemployment insurance pays for unemployment benefits if you lose your job.

Your employer pays

You pay

Income tax

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Taxable income

Income tax rate

Solidarity surcharge

If you pay more than /year in income tax, you must pay a solidarity surcharge. It's a percentage of your income tax.

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Church tax

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Your income is too low to pay income tax, so you don't pay church tax.

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This is what you pay for all taxes and social contributions.

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This is your net income. It's how much money you keep after taxes and other deductions. It's your money. You can spend it.

How to pay less income tax

• Make a tax declaration
  A tax declaration lets you deduct expenses from your income. This makes your taxable income smaller, so you pay less income tax. Relocation costs, business expenses, commuting, pension payments, insurance and healthcare are tax-deductible. Tax software is the cheapest way to make a tax declaration.
• Save for retirement
  Pension contributions are tax-deductible. Contributing to your pension is a type of tax deferral. It helps you pay less income tax over your lifetime.

How to pay less for health insurance

Use my health insurance picker to see your options. Ask my insurance broker to help you find cheaper health insurance. This is a free service.

• Use your EHIC card
  If you come from another EU country, you can use your European Health Insurance Card (EHIC) in Germany. You might not need German health insurance.
• Switch to private health insurance
  It can be better and cheaper than public health insurance. I save around €600 per month. This is a complex decision, and it can be an expensive mistake. Ask my insurance expert if private health insurance makes sense for you.
• Choose a different public health insurance
  Pick an insurer with a lower Zusatzbeitrag. You can save up to €500 per year.
• Join the Künstlersozialkasse
  If you are a freelance artist, publicist or art teacher, join the Künstlersozialkasse (KSK). They pay half of your health insurance, and half of your pension insurance. It’s always worth it.

How to pay less pension insurance

• Join the Künstlersozialkasse
  If you are a freelance artist, publicist or art teacher, join the Künstlersozialkasse (KSK). They pay half of your health insurance, and half of your pension insurance. It’s always worth it.
• Get a pension payments refund
  If you leave Germany, you can sometimes get your pension payments refunded. You can get thousands of euros back.

How to pay less church tax

• Leave the church
  If you leave the church, you stop paying the church tax. You can save a few hundred euros per year.

Housing

Rent

• Lower your rent
  If your rent is above the legal limit, you can get it reduced. Use a rent limit calculator to check if you pay too much. A Mieterverein, Conny, or a lawyer can reduce your rent. You can save a few hundred euros per month.
• Know your rights
  Avoid housing scams. If you pay a bribe to get an apartment, or pay too much for a kitchen or furniture, you can get that money back. Talk to a Mieterverein or a lawyer.
• Find a cheaper apartment
  If you already have a place to live, you have more time to find something cheaper.

Where to ask apartment questions

Utilities

• Change electricity and gas providers
  Energy companies give rebates to new customers. When the rebate expires, switch to another company.¹ Do this every year before your contract renews. You can save around €100 to €200 per year. Use Verivox or Check24 to find another energy company.
• Stop paying the TV tax
  When you receive financial aid (Bürgergeld or BAföG), fill this form to stop paying the TV tax.

Transportation

• Get the Deutschland Ticket 
  It’s the cheapest monthly ticket, and it lets you use public transit everywhere in Germany.
• Get a yearly ticket
  If you can’t get the Deutschland Ticket, get a yearly subscription from BVG or the Deutsche Bahn. Yearly tickets are cheaper than monthly tickets.
• Get a student ticket
  If you are a student or an apprentice, get a student ticket. It’s usually included in your school fees.
• Don’t drive
  In most cities, you don’t need a car. Buy a bicycle or use public transit instead. When you really need to drive, rent a car.
• Save on car insurance
  If you drive a car, there are many ways to pay less for car insurance. You can save a few euros per month.

Finances

• Choose a bank with low fees
  Find a bank that has no monthly fee and no ATM fees. N26, ING and DKB are the most popular ones, but there are many other options.
• Combine your insurance policies
  If you get all your insurances from the same company, you sometimes pay less. Combined liability and household insurance can be cheaper.² Don’t legal insurance from the same company, in case you need to sue the insurance company.³
• Talk to a financial advisor
  If you have enough money to invest and save for retirement, talk to a financial advisor. Be careful; many of them are really bad. Choose one that works with immigrants, because your needs are different. My financial advisor is Seamus at Horizon65.

Other tips

• Pay yearly, not monthly
  Car insurance, liability insurance, public transit and other subscriptions are cheaper if you pay yearly.⁴
• Compare prices often
  Every year, before your contract renews, look for a cheaper option. You can get a better deal for electricity, gas, insurance, internet and mobile phone service. Tarifcheck, Check24 and Verivox are the main price comparison websites. They don’t show you all options.
• Negotiate a better price
  When your internet contract is about to expire, call the company and ask for a better price. They will renew your contract, but give you a better plan. Vodafone gave me a free upgrade from 100 Mbit/s to 300 Mbit/s.

Sources and footnotes

1. reddit.com/r/de, reddit.com/r/de ⤴

2. test.de ⤴

3. reddit.com/r/germany ⤴

4. verbraucherzentrale.de, Finanztip ⤴