What is the solidarity surcharge?

The solidarity surcharge (Soli) is a supplementary levy on income, wage, and corporation tax. It was originally introduced in 1991 to finance the costs of German reunification and to balance economic differences between East and West Germany.

Who pays the solidarity surcharge?

The solidarity surcharge is levied on taxpayers whose income tax or corporation tax exceeds a certain allowance. Since 2021, the Soli has been abolished or reduced for around 90% of taxpayers. Only taxpayers with high incomes continue to pay it in full.

Rate of the solidarity surcharge

The solidarity surcharge is 5.5% of the assessed income tax, wage tax, or corporation tax. Taxpayers with lower incomes are protected by an allowance.

• Allowance for income tax: Taxpayers do not pay the solidarity surcharge if their income tax is below 19.450 Euro per year (38.900 Euro for jointly assessed couples) in 2025.
• Reduction zone: If the income tax is just above the allowance, the solidarity surcharge is gradually increased until it reaches the full rate of 5.5% for higher incomes.

Use of revenue

The revenue from the solidarity surcharge goes to the federal government and is used to cover general budget expenses. It was originally used to finance German reunification and for economically weak regions.

Criticism and outlook

The solidarity surcharge remains controversial despite its partial abolition. Critics call for its complete abolition, as the original purposes, such as the reconstruction of East Germany, have largely been fulfilled.

Conclusion: The solidarity surcharge was a significant contribution to financing German reunification for decades. Since 2021, however, only taxpayers with high incomes pay it. Tax programmes such as Lohnsteuer kompakt automatically indicate whether and to what extent the solidarity surcharge is due.