Solidarity Surcharge (Soli) in Germany: Who Still Pays? 2026

What Is the Solidarity Surcharge?

The solidarity surcharge (Solidaritaetszuschlag, commonly called "Soli") is a supplementary tax of 5.5% on your income tax liability. It was first introduced on July 1, 1991, to finance the enormous costs of German reunification: infrastructure, social transfers, and economic restructuring in the former East German states. Originally temporary, it became permanent in 1995 and was paid by virtually all taxpayers for three decades.

Since January 1, 2021, a landmark reform exempted approximately 90% of taxpayers from the Soli entirely. A further 6.5% pay a reduced amount through a mitigation zone. Only the top 3.5% of earners still pay the full 5.5% surcharge on their income tax.

The Exemption Thresholds for 2026

The Soli is only charged when your annual income tax liability exceeds certain thresholds:

This means: single employees with a taxable income below approximately 68,000 euros (roughly 75,000 euros gross) pay no solidarity surcharge at all. For married couples filing jointly, the threshold is approximately 136,000 euros combined taxable income.

These are exemption limits (Freigrenzen), not allowances (Freibetraege). If your income tax exceeds the threshold by even one euro, the Soli becomes payable, though the mitigation zone prevents an abrupt jump.

The Mitigation Zone

For income tax amounts just above the threshold, a mitigation zone (Milderungszone) prevents a sudden tax burden spike. In this zone, the Soli is capped at 11.9% of the amount by which your income tax exceeds the exemption limit.

Impact by Gross Salary Level

Soli on Capital Gains: No Exemption

An important exception: the 2021 reform did not change the Soli rules for capital gains. The full 5.5% solidarity surcharge on the 25% flat-rate capital gains tax (Abgeltungsteuer) still applies to all investors, regardless of income level. This makes the effective capital gains tax rate 26.375% (before church tax). The exemption thresholds do not apply to capital income.

Soli for Married Couples: Joint Filing Advantage

Married couples benefit from the double exemption threshold of 36,260 euros in income tax. Combined with the splitting procedure, this means couples with combined income below approximately 136,000 euros pay no Soli. Even when one partner earns significantly more, the splitting effect can push the combined income tax below the threshold.

For instance: a couple earning 90,000 and 50,000 euros (combined 140,000) might, through splitting, have a combined income tax just below 36,260 euros, meaning zero Soli, even though the higher-earning partner would pay Soli as a single filer.

History of the Solidarity Surcharge

The Soli has gone through several phases since reunification:

• 1991: Introduced at 7.5% for one year
• 1993-1994: Suspended
• 1995: Reintroduced permanently at 5.5%
• 2021: Exempted for approximately 90% of taxpayers
• 2023: Federal Constitutional Court confirms constitutionality

Over three decades, the Soli generated over 350 billion euros in total revenue. The remaining surcharge still brings in approximately 12 billion euros per year, roughly equal to the entire annual budget of the Federal Ministry of Education and Research.

Soli on Your Payslip and Tax Return

On your monthly payslip (Gehaltsabrechnung), the solidarity surcharge appears as a separate line item below income tax (Lohnsteuer). Your employer calculates and withholds it based on your monthly wage tax using the same exemption thresholds, scaled to monthly amounts. When you file your annual tax return, the final Soli is recalculated based on your actual annual income tax liability. If too much was withheld during the year (for instance because bonus payments temporarily pushed your monthly income above the threshold) the excess is refunded.

For self-employed expats, the Soli is included in the quarterly income tax advance payments (Einkommensteuer-Vorauszahlungen). Since self-employment income can fluctuate significantly, the Soli amount in advance payments may differ from the final amount determined when filing the return. It is advisable to review your advance payment amounts annually with the tax office to avoid large year-end adjustments.

Key Takeaways for Expats

• Most expats earning under 75,000 euros gross per year pay no solidarity surcharge at all.
• The surcharge is 5.5% of your income tax, not 5.5% of your income.
• The mitigation zone prevents a sudden jump when your income first exceeds the exemption threshold.
• Capital gains always attract the full Soli; no exemption thresholds apply.
• Married couples benefit from a double exemption threshold of 36,260 euros in income tax.
• Full abolition is not currently planned despite ongoing political debate.