Number format: this calculator uses German notation throughout — a comma is the decimal separator and a dot groups thousands. “1.234,56” means one thousand two hundred thirty-four euros and fifty-six cents. The figures come from German tax law, so they are shown the way German authorities write them.
More-favourable test (Günstigerprüfung)
Child benefit or child allowances: the tax office takes whichever is better of its own motion, never both.
In plain language
There are two forms of relief for children, but you only get one: either the monthly child benefit or the child allowance in your tax. You do not have to choose and you do not have to apply — the tax office works through both and automatically takes the better one for you. For lower and middle incomes child benefit almost always wins; only at higher incomes does the allowance become better, because it saves more tax there.
In detail
Under § 31 EStG the tax exemption of a child's subsistence level is achieved either through child benefit or through the allowances of § 32 (6) EStG — the child allowance and the childcare allowance together. The tax office only deducts the allowances if the resulting reduction in tax exceeds the child benefit entitlement for the year (§ 31 sentence 4 EStG). What is tested is the entitlement, not the actual payment: fail to claim child benefit and you lose it twice. If the allowances are more favourable, the child benefit is added back to the tariff tax. For the surcharge taxes the allowances are always deducted (§ 51a (2) EStG) — which is why the solidarity surcharge and church tax fall even when child benefit wins.
Worked example
54.000 € annual gross, one child with the full count: the allowances come to 9.756,00 € together. They would reduce the tariff tax from 7.915,00 € to 4.917,00 € — relief of 2.998,00 €. The child benefit entitlement for the year is 3.108,00 €, which is 110,00 € more: child benefit is more favourable, the allowances are not deducted, and the amount assessed stays at 7.915,00 €. At 90.000 € annual gross it flips: there the allowances save 4.027,00 € of tax, more than the child benefit. They are deducted, the child benefit is added back — the amount assessed is 18.709,00 €.
In brief
If the relief from the allowances exceeds the year's child benefit, they are deducted and the benefit is added back.
Legal basis: § 31 EStG, § 32 Abs. 6 EStG, § 66 Abs. 1 EStG · as at 2026