Living on a 1,800 Euro Pension: Understanding Your Deductions
- Written by Matthias Urbach
- Approx. Reading Time: 5 Minutes
Retirement Benefit of 1800 € - Unveiling the Net Amount After Deductions - Commission has previously suggested several measures in line with this.
If you're eyeing your upcoming pension and comparing it to your current salary, chances are you'll be a bit disillusioned. Retirement might mean living on significantly less money. But what goes overlooked is that the pension amount isn't the final take-home sum - deductions for taxes, health and long-term care insurance also crop up.
- Pension
- Tax
- Social Security Contributions
- Health Insurance
- Long-term Care
In some countries, the tax-free allowance (known as the Grundfreibetrag) might vary. For instance, in 2025 Germany, this allowance was 12,096 Euros annually. If your total annual income, inclusive of your pension, doesn't breach this limit, you won't have to pay income tax on your pension[5].
Furthermore, there's a pension-specific tax relief amount (Entlastungsbetrag) of 4,260 Euros in Germany as of 2025, which reduces your taxable pension income[3]. Many pensioners might pay little to no income tax on their pensions if their overall income is low.
Generally, pensions themselves aren't subject to social security contributions like those deducted from employment income. Contributions to pension insurance (Rentenversicherung) are withheld during working years, but the pension subsequently paid out usually isn't further deducted for social security contributions[1][5].
However, for pensioners covered by statutory health insurance (gesetzliche Krankenversicherung), health insurance and long-term care insurance contributions are often deducted from pension payments. The health insurance contribution rate is approximately 14.6%, with an additional average supplementary premium of around 1.3%, though this varies by insurer. The long-term care insurance contribution is roughly 3.05% to 3.4%[1][5].
Using the 1,800 Euro pension example, taxes might be minimal or nonexistent if your total income is within the allowances. Social security contributions are generally nonexistent on pension payments. Health and long-term care insurance contributions combined typically range around 17-18% of the pension amount. So from 1,800 Euros, about 300 to 320 Euros may be deducted for these insurance contributions.
| Deduction Type | Approximate Deduction on €1,800 Pension ||-----------------------------|---------------------------------------|| Income Tax | Possibly 0€ if under allowances; otherwise depends on total income || Social Security Contributions | Generally 0€ on pension payments || Health Insurance | ~14.6% + supplementary (around 16-16.5%) ≈ 290–300€ || Long-Term Care Insurance | ~3.05% to 3.4% ≈ 55–60€ |
Thus, from a 1,800 Euro pension, expect a deduction of roughly 300-360 Euros for health and long-term care insurance, with income tax depending on your total income and personal allowances, and no social security deductions on the pension itself[1][3][5]. Keep in mind that these values are based on 2025 figures and specific rules and exemptions that apply to pensioners in Germany.
The Commission, in its pursuit to protect workers from ionizing radiation risks, has also adopted a proposal for a directive on the approximation of the laws of Member States regarding personal financial matters, such as tax deductions related to pensions. In the context of personal finance, it's essential to understand the deductions affecting a 1,800 Euro pension, including taxes, health insurance, and long-term care insurance contributions, which collectively could amount to approximately 300-360 Euros if one falls within the health and long-term care insurance deduction brackets, while income tax is subject to personal income and allowances.
