Germany: Key Financial and Tax Changes Take Effect in February 2026

Germany has implemented several important financial and tax adjustments starting February 2026, affecting salaries, health insurance contributions, and cryptocurrency reporting rules. Many employees are already experiencing a “pay slip shock” as their net take-home pay appears lower than expected.
Basic tax-free allowance (Grundfreibetrag) increased
The annual tax-free threshold has risen from €12,096 to €12,348. This means no income tax is charged on earnings up to €12,348 per year (for single individuals). For married couples or jointly assessed taxpayers the threshold is effectively doubled.
Health insurance additional contribution (Zusatzbeitrag) raised
The average additional health insurance contribution has increased from around 2.5% to 2.9% in 2026. Some major providers have set even higher rates:
Techniker Krankenkasse (TK): 2.69%
DAK-Gesundheit: up to 3.2%
Certain funds: over 4%
This rise, combined with the higher social security contribution ceiling, is reducing net salaries especially for higher earners (above roughly €77,400 gross per year).
Cryptocurrency rules under DAC8 now fully enforced
The EU’s DAC8 directive, implemented in Germany through the Kryptowerte-Steuertransparenzgesetz, requires all crypto exchanges (Coinbase, Kraken, Binance, Trade Republic, etc.) to report user transaction data, wallet addresses, names, and tax IDs to the German tax authorities (Finanzamt). Anonymous crypto trading is effectively ended. First reporting covers 2026 and is due by July 31, 2027. Accounts may be frozen if users fail to verify their data.
Many salaried workers are noticing reduced net pay on their February payslips due to the combined effect of higher health insurance contributions and other minor adjustments. Lower and middle-income earners generally benefit from the increased tax-free allowance, while higher earners face more pressure.