Basic exemption calculator 2026

Why the saving is not always exactly 154 €

The basic exemption is not subtracted from gross pay but from what remains after unemployment insurance (1.6%) and the funded pension (the calculator assumes 2%). The tax saving is therefore 22% of the smaller of two numbers: 700 € or your pay after those deductions. The full saving of 154 € a month only kicks in at a gross salary of at least 726.14 €.

At lower salaries the calculator shows the applied exemption as equal to gross, but the real saving is smaller.

In practice, a part-timer earning less than 726.14 € gross leaves part of the exemption unused every month. If you also have another job with a higher salary, it makes more sense to file the application there.

Three examples show the difference:

• Gross 500 €: applied exemption 500 €, income tax without it 106.04 €, with it 0 €. Saving 106.04 € a month.
• Gross 700 €: applied exemption 700 €, but after deductions taxable income is only 674.80 €. Saving 148.46 € a month.
• Gross 900 €: income tax without the exemption 190.87 €, with it 36.87 €. The saving is the full 154.00 €.

Same saving, different impact: 1500 € and 3000 €

On a gross of 1500 € income tax would be 318.12 € without the exemption and 164.12 € with it. On 3000 € the figures are 636.24 € and 482.24 €. Either way the saving is 154 € a month, or 1,848 € a year, because in 2026 the exemption no longer depends on income.

In relative terms the gap is still large. The person earning 1500 € pays almost half as much income tax thanks to the exemption, with an effective rate of about 10.9% of gross. At 3000 € the tax falls by only about a quarter and the effective rate is 16.1%. A flat amount helps people on low and middle salaries the most.

776 € at old-age pension age

If you tick the pension-age option, the calculator uses 776 € a month. On a gross of 1500 € income tax is then 147.40 €, and the saving compared with no exemption is 170.72 € a month, or 2,048.64 € a year. That is 16.72 € a month more than with the general 700 € exemption.

The calculator only looks at salary. If a pension is paid at the same time, it matters where the exemption application was filed, because it can be used in one place only. The salary calculator shows net pay and employer cost for the same situation.

The year selector: how the 2023-2025 system worked

In 2023-2025 the exemption was up to 654 € a month (7,848 € a year) and tapered off smoothly for annual income between 14,400 and 25,200 euros. In monthly terms that is a salary of 1200 to 2100 €; above that there was no exemption. The calculator assumes the salary is the same all year, so annual income is the monthly salary times 12.

Pick a year to check an old payslip or to see what the 2026 change meant for you:

• 2025, gross 1500 €: exemption 436 €, tax saving 95.92 € a month.
• 2025, gross 1800 €: exemption 218 €, saving 47.96 €. In 2026 the same salary saves 154 €, which is 106.04 € a month more.
• 2025, gross 2100 € or more: exemption 0 €, no saving.
• 2024, gross 1500 €: also a 436 € exemption, but the income tax rate was 20%, so the saving was 87.20 €.

Common misunderstandings

Several myths about the basic exemption lead to the wrong expectations:

• The exemption is not 700 € of extra money. It is the part of income on which no income tax is charged, and the cash benefit is at most 22% of it, or 154 €.
• It does not reduce social tax, unemployment insurance or the funded pension. Those are still calculated on the full gross.
• If your employer did not apply the exemption, the money is not lost. The overpaid income tax comes back with the annual tax return.
• Applying the exemption with two employers at once does not double the saving. Tax on the over-used part has to be paid back after the year ends.

How to compare the result with your payslip

Enter your gross salary and look up the income tax withheld on your payslip. If it is close to the "income tax with exemption" row, all is well. If it matches the "income tax without exemption" row instead, no application was filed or the employer did not apply it. You overpay up to 154 € for every such month.

A small gap can come from a 4% or 6% II pillar rate or from a bonus included in the pay. To see the effect over a whole year, use the income tax refund calculator: leave the "exemption was applied" box unticked there and you will see how much the unused exemption would bring back.