The Basis pension is tax-advantaged while paying in, while the subsequent payout is taxable on the other. The tax deduction is gradual, both in the savings phase and in the payout phase.
The following applies to pension savings:
In 2023, 100 percent of contributions to the Basis pension up to the maximum contribution will be tax-reducing.
The following applies in the payout phase:
In 2023, 83 percent of the pension will be taxable. The planned full taxation from 2040 will be further postponed according to the federal government's current plans
The following table shows the tax advantage of the Basis pension for different income levels for a 40-year-old self-employed single person who is neither insured by law nor by a pension fund.
Annual gross income | Monthly Basis pension contribution | Annual Basis pension contribution | Monthly tax benefit | Annual tax benefit |
30.000€ | 250€ | 3.000€ | 72€ | 864€ |
30.000€ | 500€ | 6.000€ | 141€ | 1.692€ |
50.000€ | 500€ | 6.000€ | 180€ | 2.155€ |
50.000€ | 1.000€ | 12.000€ | 348€ | 4.171€ |
70.000€ | 1.000€ | 12.000€ | 425€ | 5.220€ |
70.000€ | 1.500€ | 18.000€ | 630€ | 7.559€ |
How much tax refund you can expect depends on the amount of your taxable income and your tax rate. As a general rule, the more you earn, the more you get back from the tax office. However, the following also applies: the higher your income in retirement, the more tax you pay on your Basis payout. This is because the individual tax rate is also decisive here.
Can the Basis pension be terminated?
The Basis pension is intended to provide you with the same level of protection for your pension from the start of your retirement as statutory insurance or a pension fund. The legislator has therefore decided that policyholders may not terminate this contract. If you can no longer afford or no longer wish to pay the contributions for the pension, the insurance must be made non-contributory. Alternatively, some providers offer the continuation of your pension plan for a minimum contribution of 25 or 50 euros per month.
How high are the taxes on the Basis pension?
When you retire, Basis savers have to pay tax on their pension payments from the contract at their income tax rate. The proportion of the pension that you have to pay tax on depends on the year in which you retire.
If you retire in 2023, the taxable portion of the Basis pension payout is 83%. This means that you will receive 17% of the money tax-free and 83% will be taxable.
However, the taxable portion for Basis pensions will rise to 100 percent in the coming years. If you retire in 2040 or later, you will have to pay tax on the entire Basis pension.