2025 is just around the corner and it's shaping up to be an eventful year in German society and politics. From the Deutschlandticket and snap elections to health insurance contributions, passports and post, here’s everything you need to know to prepare for another year in Germany.

Changes to official issues

When it comes to official issues, like registering your address or applying for a new ID, Germany is attempting to make administrative processes more efficient. Here's what's changing in 2025. 

Passports and IDs can be delivered by post

Technically, since November 1, 2024, if you apply to renew your German identity documents, you can receive your new documents by post. However, a transition period means that only from January 2025 are administrative offices obliged to offer the service.

Previously, if you applied for a German passport, ID card, or eID residence permit in Germany, you needed to return to the responsible administrative office to collect your document when it was ready. 

This second trip will no longer be necessary. You will receive the PIN letter you need to activate your eID at your initial appointment and the new identity documents can be sent to your home address for a small postage fee.

Germany will liberalise its surname laws

On May 1, 2025, Germany will relax its laws around family names. Previously, if a couple married in Germany, it was possible for one of the partners to add the other partner’s name to theirs e.g. Johannes Mustermann could marry Alexa Schmidt and become Johannes Schmidt Mustermann.

Under the new law, Johannes and Alexa could make Schmidt Mustermann their shared surname, with or without a hyphen. 

The law will also give couples more freedom when choosing their child’s surname. If Johannes and Alexa have married and kept their respective names - or even if they aren’t married - if they decide to have children they will now have the option to give their child the Schmidt Mustermann surname.

Changes to healthcare and social security

Here are a few changes affecting health insurance rates, hospital reforms and social benefits in Germany:

Changes to the German federal budget in 2025

Our guidance about changes to social security, child benefits and tax rates in Germany in 2025 comes with a caveat this year. Since a German government disagreement over 2025 budget plans caused the traffic light coalition’s collapse in November and Germany is heading for a snap election in February, a 2025 budget may not be finalised until November 2025.

In the meantime, Germany’s existing 2024 budget will roll over into 2025, thanks to the “provisional budget management” clause in the German constitution. The “provisional budget management” clause allows those in office to continue funding all existing, basic institutions, construction projects and services, fulfil any legal funding obligations and fund new projects that have already been agreed upon in the Bundestag.

As such, the below information is an overview of social security, tax, healthcare and transport changes which have been set in stone for 2025. Many other policies will be renegotiated during the year.

Additional health insurance contributions will increase

In Germany, statutory health insurance companies charge 14,6 percent of a person’s gross salary for basic coverage. The cost of this 14,6 percent is divided equally between employer and employee.

On top of basic coverage, statutory health insurance companies can charge an additional contribution payment (Zusatzbeitrag). These contributions may entitle patients to additional treatments, such as cancer screenings under 30, contraception or teeth cleaning, without them having to pay more upfront.

While the government gives guidance on the maximum amount health insurance companies can charge for the Zusatzbeitrag each year, these limits are not legally binding. On January 1, 2025, the limit will increase from 1,7 percent to 2,5 percent.

Most German health insurance companies have now announced how much they will increase their rates. The Techniker Krankenkasse, Germany’s most popular insurance provider, will increase its Zusatzbeitrag to 2,56 percent, DAK by 2,8 percent and Barmer by 3,29 percent.

Increases vary and some companies don’t increase their rates at all, so it is best to check with your provider for updates. If the increase is too much, you are entitled to switch providers until the January 31, 2025.

Long-term care insurance contributions to go up

Long-term care insurance (Pflegeversicherung) was added to Germany’s social security system in 1995 to ensure everyone has access to long-term nursing care, whether due to accident, illness or old age.

Employees fund long-term care benefits with mandatory contributions. In 2025, the average contribution rate will increase by 0,2 percent to 3,6 percent of your income. Rates differ slightly for those with and without children, with childless people paying more. 

Hospital reforms across Germany

Germany’s hospital reform will become law on January 1, 2025, after passing through the Bundesrat, the upper house of the German parliament, on November 22.

Under the new law, the government will reorganise how federal funding is distributed to hospitals to improve treatment quality and reduce financial pressure on clinics. The changes will be gradually implemented in Germany’s 1.700 hospitals over the next few years until 2029.

The new law will introduce the guaranteed “Vorhaltepauschal” (retention lump sum). This means that clinics will not be financed based on the number of patients they treat but on the number of services offered, such as staff numbers, emergency services or specific medical equipment available on site.

The reform should increase the quality of healthcare services for people living in rural areas. Patients will also be referred to specialist doctors sooner to reduce healthcare costs in the long run, and patients requiring specialist treatment will be able to visit specialist doctors working in hospitals as outpatients.

Bürgergeld payments will not increase in 2025

Bürgergeld (the citizens’ allowance) is a long-term unemployment benefit - separate from Arbeitslosengeld - which replaced Harz IV in 2022.

Since January 2024, the monthly Bürgergeld payment for single people has been 563 euros. It is standard for this set amount to increase each year, but in July the German government announced that Bürgergeld rates would be frozen for 2025.

Bürgergeld recipients will also be subject to more rules and checks. They will have to report to the job centre more regularly, will need to provide a “valid reason” to reject work or face sanctions, will have to use their assets sooner, accept longer work commute times for prospective jobs and be penalised more harshly if they are found to be working cash-in-hard.

For more information about the new upcoming rules, read our article about the changes affecting Bürgergeld in 2025.

Child benefit payments will increase by 5 euros

All parents in Germany are entitled to monthly benefits (Kindergeld) to offset the cost of raising children. In 2025, this monthly payment will increase by 5 euros to 255 euros per child, no matter how many children you have.

As well as child benefit, certain parents are entitled to claim a supplementary child allowance (Kinderzuschlag) for each child who is under the age of 25, unmarried and lives in their household. From January 1, this will increase by 5 euros to 297 euros per month.

Under certain conditions, a tax-free child allowance (Kinderfreibeitrag) may also be granted to parents, instead of the child benefit. In 2025, the Kinderfreibeitrag limit will be raised from 3.192 euros per child to 3.336 euros (the child allowance), while the additional 1.464 euros (the allowance for care and upbringing or educational needs), will stay the same.

A government plan to replace the four separate child benefits with one bundle payment called the basic security payment (Kindergrundsicherung) has now been put on hold. Whether it will be picked up by Germany’s next federal government remains to be seen.

Housing benefits will increase by 15 percent

Every two years, the housing benefit (Wohngeld) in Germany is automatically adjusted to reflect developments in prices and rents. The next increase will take place on January 1, 2025, and see Wohngeld go up by an average of 15 percent.

This will equate to around 30 extra euros per month for the approximately 1,9 million people in Germany who receive housing benefits.

Changes to the tax system in Germany

Few countries across the world have more laws around taxation than Germany. Here’s an overview of what is changing in 2025:

Basic tax-free allowance threshold to rise

In Germany, low-income earners aren’t obliged to pay income tax if they earn below a certain amount, known as the “basic allowance” (Grundfreibetrag). In 2025, the Grundfreibetrag amount that people can earn and not have to pay tax on their income will increase by 300 euros to 12.084 euros per year.

On January 1, the Grundfreibetrag threshold for 2024 will also retroactively increase from 10.908 euros to 11.784 euros.

German tax return deadline will return to the standard

During the coronavirus crisis, the German tax office (Finanzamt) adjusted tax declaration deadlines to create wiggle room in a period where people’s finances had become more complicated.

In 2025, the tax deadlines which were standard before the pandemic will return. If you plan to complete your 2024 tax return by yourself, you must submit it to the local Finanzamt by July 31, 2025. If you submit your 2024 declaration with the help of a tax advisor, you have until April 30, 2026, to do so.

Changes affecting working people

As is standard, the minimum wage will increase in Germany in January. Meanwhile, there will be new rules for migrant workers living in Germany on an EU Blue Card.

Minimum wage to increase

From January 1, 2025, the minimum wage in Germany will increase from 12,41 euros to 12,82 euros per hour. The national minimum wage is determined by the Minimum Wage Commission (Mindestlohnkomission) and increases annually in Germany.

New earning threshold for mini-jobbers

In Germany, mini-job employment means part-time workers have certain tax exemptions. In 2025, the amount of money a mini-job employee can earn before paying tax will rise, from 538 euros to 556 euros per month, or 6.672 euros per year.

New minimum income for Blue Card visas

The EU Blue Card (Blaue Karte) is a visa which allows highly qualified non-EU nationals to live and work in EU states where they have been offered a job.

However, these visas can only be used for jobs which pay over a certain salary. From January 1, 2025, the minimum annual salary for working in Germany on an EU Blue Card will increase to 48.300 euros before tax.

New employees can digitally sign work contracts

From January 1, 2025, employees in Germany will be able to sign a work contract digitally and will not have to provide a wet signature for the contract to be valid.

Under the current Verification Law (Nachweisgesetz) German employers can send their employees a digital version of their contract, but a physical copy must also be provided and a wet signature from both parties is required to validate the contract. 

Changes to transport and travel

Public transport and driving are both getting more expensive in 2025, while flight routes out of German airports will expand.

Deutschlandticket to cost 58 euros monthly

Germany’s nationwide public transport ticket, the Deutschlandticket, will cost 58 euros per month from January 1, 2025. If you have a Deutschlandticket through your employer, a student Deutschlandticket, or would like to cancel your subscription, find out more in our article about the new Deutschlandticket.

Berlin public transport tickets will be more expensive

From January 1, 2025, the cost of buying a single ticket for the U-Bahn, S-Bahn, tram or bus in the AB zones of Berlin will increase by 7,5 percent from 3,50 euros to 3,80 euros per journey. 

The price of a four-journey ticket (4-Fahrten-Karte) will also increase from 10,80 euros to 11,60 euros.

CO2 tax will mean buying fuel is more expensive

In 2021 the German government introduced a CO2 tax in the transport and construction sectors. The tax has increased each year since and in 2025 will rise from 45 to 55 euros per tonne of CO2. This means drivers can expect diesel and petrol to get slightly more expensive.

Expanded flights, especially from Frankfurt

Certain airlines are expanding and minimising their routes offered in and out of German airports in 2025. While Irish budget airline Ryanair has announced that it will discontinue one-fifth of its services in and out of Berlin-Brandenburg BER Airport, Condor, Discover and easyJet will expand flight routes.

Condor will focus on expanding international and domestic flights out of Frankfurt; Discovery will expand transatlantic routes out of Frankfurt and Munich; and easyJet and Eurowings will add connections from Düsseldorf.

Changes affecting consumers

The future isn’t looking so bright for the ailing German economy in 2025. Here’s what we know for sure about changes coming to consumers:

Electricity will get more expensive

In 2025, the average cost of electricity will increase to 3,15 cents per kilowatt hour. For the average family household, this means annual utility bills for electricity will be around 40 euros more expensive.

Postal costs will increase by 10,5 percent

The cost of sending a letter or postcard from Germany will increase by 10,5 percent to 95 cents in 2025. Sending a compact letter weighing up to 50 grams will cost 1,10 euros.

The cost of sending a parcel with DHL, which operates Deutsche Post’s domestic packaging deliveries, will also increase. The price of sending a small package will rise from 3,99 euros to 4,19 euros and a medium package from 4,79 euros to 5,10 euros.

Several German cities to trial cannabis dispensaries

Cannabis for personal use has been legal in Germany since April 1, 2024. Anyone over the age of 18 can grow up to three cannabis plants and keep up to 50 grams of cannabis at home. Adults can also carry up to 25 grams of cannabis on their person in public spaces.

On July 1, 2024, Cannabis Social Clubs (CSCs) were introduced. A CSC is an association (Verein) where up to 500 members can “access” but not “purchase” marijuana. These legal changes were part of Germany’s cannabis legalisation “Schnellesäule” (speedy pillar). 

Germany is now cautiously entering the second pillar phase, trialling the commercial sale of cannabis in certain regions. Starting in 2025, trial dispensaries will be opened in Frankfurt, Hanover and Berlin, among other cities.

Important dates in 2025

One of the most important dates in Germany’s 2025 calendar comes early in the year:

Federal election on February 23

With the traffic light coalition having collapsed and Olaf Scholz losing his confidence vote, Germany is heading to the polls on February 23. The first two months of the year are set to be jam-packed with hard politics.

Germany’s democratic system lends itself to coalition governments; only once has the modern federal republic been governed by a single party. With the CDU / CSU polling as the favourites, leader Friedrich Merz is widely expected to become chancellor and will likely be in charge of forming the next governing coalition.

So far, Merz has kept his cards close to his chest as to who the party may choose. However, since the conservatives have declined to collaborate with the AfD, the SPD or Greens are the most likely coalition candidates.

Extra public holiday for Berlin on May 8

Berliners have even more of an opportunity to relax in early May next year. In 2025, the city-state will recognise May 8 as a one-off public holiday (Feiertag) to mark 80 years since the end of Nazi rule in Germany, also known as Tag der Befreiung (Liberation Day).

Events commemorating Germany’s capitulation to the Allies will be held in Berlin throughout the day. In its announcement, the city said the holiday intended to raise awareness that “peaceful coexistence is still not a matter of course”.

Happy New Year from IamExpat

Whatever your plans for the new year, we hope it is a rewarding and peaceful one. Guten Rutsch!

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