Education
Sparer-Pauschbetrag explained: Germany's saver's allowance
€1,000 of capital income per year tax-free — when the order sits at the right bank.
Last updated: 14 August 2026 · By The Acutic Research Team
The Sparer-Pauschbetrag is Germany's annual saver's allowance: up to €1,000 of capital income per person per year stays tax-free — €2,000 for jointly assessed couples (§ 20 (9) EStG). For the bank to apply it at source, it needs a Freistellungsauftrag (exemption order); without one, flat-rate tax is withheld from the first euro and only the annual tax return recovers it.
The amounts and their history
Since 2009 the lump sum replaces any deduction of actual expenses for capital income — custody fees or research costs are not deductible on top. It was raised effective 1 January 2023 by the Jahressteuergesetz 2022:
| Period | Single assessment | Joint assessment |
|---|---|---|
| 2009–2022 | €801 | €1,602 |
| since 2023 | €1,000 | €2,000 |
How the exemption order works
- Splitting is allowed: the allowance can be spread across banks in any proportion — say €600 at the broker, €400 at the savings bank. All orders together must not exceed €1,000 (or €2,000).
- Changeable mid-year: raising works any time; lowering only down to what the current year has already used.
- Validity: an order stays in force until changed or revoked and requires the tax identification number. Couples file a joint order for the joint amount.
- Order of operations at the bank: current losses from the loss-offset pots come first (§ 20 (6) EStG; equity losses only against equity gains), then the exemption order applies to the remaining positive income (§ 43a (3) EStG).
Interaction with the Vorabpauschale
The Vorabpauschale of accumulating funds is ordinary investment income too (§ 16 (1) no. 2 InvStG) and consumes the allowance. The difference from interest: no cash arrives — the tax would be debited from the settlement account (deemed inflow on the first business day of the following year, § 18 (3) InvStG). A sufficient exemption order at the custodian bank prevents exactly that debit. The Vorabpauschale calculator shows the amount involved.
One worked year
Three kinds of income, one allowance — every figure in the table is computed from the inputs at render time (tax rate 26.375% = 25% flat tax × 1.055 solidarity surcharge, no church tax):
| Item | Amount |
|---|---|
| Interest (savings account) | €300 |
| Fund distributions (after partial exemption) | €450 |
| Vorabpauschale, taxable share | €220 |
| Total capital income | €970 |
| Allowance (single assessment) | − €1,000 |
| Taxable remainder | €0 |
| Tax withheld (26.375%) | €0.00 |
Sources: § 20 (9) EStG (allowance), § 20 (6) EStG (loss offsetting), § 16 (1) no. 2 and § 18 InvStG (Vorabpauschale). As of August 2026.
Frequently asked questions
Can the Freistellungsauftrag be split across several banks?
Yes. The allowance can be distributed across institutions in any proportion, as long as all exemption orders together do not exceed €1,000 (€2,000 for jointly assessed couples). Each order stays in force until changed or revoked.
What happens without a Freistellungsauftrag?
The bank withholds 25% flat-rate tax plus the solidarity surcharge (and church tax where applicable) from the first euro of capital income. Over-withheld tax is recovered through the Anlage KAP of the annual tax return — the allowance is not lost, it just applies later.
Does the Vorabpauschale count against the allowance?
Yes. The Vorabpauschale is investment income under § 16 (1) no. 2 InvStG and consumes the allowance exactly like interest or distributions. With a sufficient exemption order on file, the bank debits no tax on the deemed-inflow date.
Can an exemption order be changed mid-year?
Yes — it can be raised at any time. Lowering it is only possible down to the amount already used in the current year; going below that works only at the turn of the year.
Further reading: Vorabpauschale explained simply (with worked examples) and the Vorabpauschale calculator 2026. Create free account.
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