Employment income credit

You can be given the tax credit for employment income i.e. work income if you receive wages subject to tax, profit-shares of a small business, or other comparable earnings.

The credit reduces your state income tax directly. If your state income tax is less than the amount of credit, the credit will reduce your municipal tax, church tax and health care contribution on a proportional basis.

Creditable amount in 2025:

• The maximum credit for employment income is €3,225.
• If you are a wage earner or self-employed individual, and you have turned 65 before the beginning of 2025, the maximum credit is €4,425. If you are younger, you are not entitled to any age-based increase that would affect the maximum credit.
• The credit is 18% of qualifying income
• The credit is reduced by 2.22% for the part of net taxable earned income exceeding €24,250, and by 3.44% for any part in excess of €42,550.
• For each child under the age of 18 in your custody, you are entitled to a €50 increase to the maximum amount of the credit for work income.
  • If you are a single parent, the increase is doubled.

Creditable amount in 2024:

• The maximum credit for employment income is €2,140.
• If you are a wage earner or self-employed individual, and you have turned 65 before the beginning of 2024, the maximum credit is €3,340. If you are younger, you are not entitled to any age-based increase that would affect the maximum credit.
• The credit is 12% of qualifying income
• The credit is reduced by 2.03% for the part of net taxable earned income exceeding €23,420, and by 1.21% for any part in excess of €71,900.