Spouse equalization
EUR 13,805
Maximum taxable transfer from the higher earner to the lower earner.
This simulation shows how capped real splitting could reform today's German joint tax filing. The concept replaces full splitting with a capped spouse equalization: up to EUR 13,805 can be transferred from the higher earner to the lower earner and taxed there. Additional revenue should flow into higher family benefits, such as child benefit and the child allowance. The comparison charts below use fixed income splits and measure the additional burden compared with today's joint splitting.
This calculator shows your monthly net through tax classes, an approximation of today's splitting tariff, capped real splitting, and the no-splitting reference at the same time.
Why this matters: the proposal does not replace full splitting with pure individual taxation, but with a capped spouse transfer and higher family benefits.
The calculator shows four views side by side: class III/V for monthly perception, class IV/IV with factor as an approximation of today's splitting tariff, capped real splitting, and class I/I as the no-splitting reference.
Method: first we run class III/V as the monthly payroll view. The factor is calculated from a separate IV/IV baseline run without factor and is not derived from III/V, which avoids distortions from the withholding distribution. For capped real splitting we use simulation mode 3 with IV/IV as the neutral input: a capped transfer of up to EUR 13,805 is deducted from the higher earner and taxed as other income by the lower earner. In the long run this amount should be linked to the basic allowance. The child count from the input is passed into the care-insurance and child-allowance calculation. For the no-splitting counterfactual we sum two separate class-I single calculations.
The model is based on the SVR proposal: spouse equalization remains, the advantage from very unequal incomes is capped, and released funds are shifted more strongly toward children.
Spouse equalization
EUR 13,805
Maximum taxable transfer from the higher earner to the lower earner.
Child benefit
EUR 316
Proposed monthly amount per child instead of EUR 259 in the 2026 status quo.
Child allowance
EUR 11,902
Proposed allowance instead of EUR 9,756 including care, education, and training allowances.
Distribution
+585 / +417 / -316 EUR
Average annual effect for couples with children, single parents, and couples without children.
Labor supply
49,000 FTE
Expected additional labor supply from better incentives for second earners.
The charts compare annual additional burden against today's joint splitting. The three charts use fixed income splits of 100/0, 80/20, and 60/40. Capped real splitting uses a capped transfer of up to EUR 13,805; the two-child line additionally includes the reform child benefit and reform child allowance.
Calculating simulations...
Simulation of annual additional burden versus today's joint splitting for fixed income splits. The family line accounts for reform child benefit and the reform child allowance; excluding church tax. Calculation engine used: www.obolusfinanz.de/en/taxapp
> Today's full splitting: Relieves unequal incomes but weakens second-earner incentives
> Capped real splitting: Keeps spouse equalization, caps the advantage, and shifts support toward children
Formally no. Splitting determines the annual tax in the assessment, while tax classes only shape monthly withholding. In practice they are linked because tax classes determine how strongly splitting is felt in day-to-day cash flow.
Because people react to monthly net income, not to the tax return. III/V makes visible how splitting changes ongoing cash flow and therefore labor incentives, especially for second earners.
The factor method distributes the expected annual tax more evenly across both partners. It is therefore a strong approximation of the splitting-tariff burden and avoids distortions in withholding.
Four perspectives at once: III/V as monthly perception, IV/IV with factor as an approximation of today's splitting burden, capped real splitting, and I/I as the no-splitting reference.
It is a reform simulation: instead of halving the full joint income, the higher earner can transfer up to EUR 13,805. The amount reduces their tax base and is taxed by the other spouse.
The concept uses additional revenue from capping the splitting advantage for higher family benefits, such as higher child benefit and a higher child allowance. The child field feeds the child count into the care-insurance and child-allowance simulation.
No. The final tax only results from the annual income-tax assessment. IV/IV with factor is, however, usually a very good approximation and often sits close to the final equalization.
I/I stands here for individual taxation without splitting. That makes it easy to see the tax advantage created by splitting and how an alternative system would change the result.
No. Social contributions depend on each individual income and are not changed by joint tax splitting.