What Is Parental Allowance?
Parental allowance compensates for part of the lost income when parents stay at home to care for their child after birth. It is paid for up to 14 months to both parents, and the period can be flexibly divided. One parent can take a maximum of 12 months alone, and two additional months are reserved for the other partner. For non-working parents, the minimum parental allowance amount is 300 euros per month.
Amount of Parental Allowance
The amount of parental allowance generally ranges from 65 to 67 percent of the average monthly net income from the last twelve months before the birth, but is at least 300 euros and at most 1,800 euros per month. Parents with higher incomes receive 65 percent, while parents with lower incomes can receive up to 100 percent of their previous income. Additional factors such as multiple births and sibling bonuses can further affect the amount of parental allowance.
Parental Allowance Plus
There is also the so-called Parental Allowance Plus. This allows parents who work part-time between 24 and 32 hours per week to extend their parental allowance period. Parental Allowance Plus is particularly attractive if both parents return to partial employment soon after the birth.
A new feature is that Parental Allowance Plus can now also be continued if one parent becomes ill for an extended period during the partnership bonus months and no longer receives continued salary payments. The Federal Social Court ruled that this should continue to be promoted in the spirit of shared child-rearing.
Tax Context
Parental allowance is subject to the progression clause. This means that although it is not directly taxed, it increases the tax rate on the remaining taxable income. This often results in a higher tax burden on the total income.
Income Limits
- Births from 1 April 2025: 175,000 euros of taxable income
- Births from 1 April 2024: 200,000 euros of taxable income
- Births 1 September 2021 to 31 March 2024: 300,000 euros for couples, 250,000 euros for single parents
The relevant taxable income is the income in the calendar year prior to the birth of the child.
New Regulations from April 2024
The possibility for parents to receive basic parental allowance simultaneously will be redesigned for births from 1 April 2024. A simultaneous receipt of basic parental allowance will generally only be possible for a maximum of one month and only within the first twelve months of the child's life.
Exceptions apply to:
- Parents of premature babies (born at least 6 weeks before expected due date)
- Parents of twins, triplets, or other multiples
- Parents of newborn children with disabilities
- Siblings with disabilities who receive the sibling bonus
Further Information and Application
📋 Apply
Further information and the link to the application can be found on the Federal Portal website:
Apply for Parental Allowance🧮 Parental Allowance Calculator
Calculate the expected amount of your parental allowance:
Parental Allowance CalculatorProfessional Advice
Our expert Johannes Stetten is happy to advise you on all questions regarding parental allowance and its tax implications.
Johannes Stetten
Chairman
Lohnsteuerhilfe e.V. Munich