How to Pay 0% Income Tax – Part 2

In this series of posts I am playing with some numbers to see how much can a family of 4 in Germany earn without paying any tax at all. Paying no tax is not our goal. I’m just having fun learning about these issues and sharing some calculations.

Make sure you read How to Pay 0% Income Tax – Part 1 where I allready covered some scenarios.

These scenarios don’t reflect our situation! For example, we don’t have minijobs. I’m just playing with scenarios here, but, to be fair, the result really makes me think about some possible changes in our life and work setup…

This post will extend the calculations and consider other tax deductible things that you can use to increase your net income.

Scenario #4: Rental Income, Stock Market Income, a Minijob each

I. INCOME:  60.000€

a. Taxable Income: 43.038€

  1. Real Estate Income: 29.804€
  2. Other Work Income: 13.234€

b.Tax Free Income: 16.962€

  1. Kindergeld: 4.560€
  2. Stockmarket Income: 1.602€
  3. Minijob x 2: 10.800€


1. Personal Tax Allowance (for 2 people): 17.304 €
2. Deductible stuff from real estate: 12.500€
3. Deductible Health Insurance: 6.500€
4. Office Room: 1.000€
5. Deductible Work Gadgets: 1.000€
6. Accountant: 2.000€
7. Phone, Internet: 400€
8. Other deductible stuff: 2334€

In order to have 0 tax, your taxable income (I.1) needs to be covered by the deductible expenses (II).


I.a.2: Other Work Income: I specifically used a number here that leads to exactly 0% tax after all the deductible stuff. I am sure a couple can earn that money in a yearon top of their minijobs.

I.b.2 Stockmarket Income: Every person in Germany can have a capital gain (stockmarket, dividends, interest) income of 801€ per year tax free. For married couples double that. How much money you need to have invested to have this income? If you use the 4% withdrawal rate, or 4% interest rate, all you need to do is multiply 1602 with the number 25. You get: 40.050€

II.3 Health insurance: (except extra stuff like single room in the hospital) can be put against your tax. 6500€ for a family is a very conservative (low) ammout, I think. More information about this, more rules and example calculations here.

II.4 Office Room: if you work from home, you can set up an office room, that you really only use it for work. All the costs (heating, electricity, etc) of this room are deductible. This ammount is, as far as I can tell quite realistic.

II.5 Tech Gadgets: if you are like us, you might buy a new smartphone or laptop (for work of course) every other year, change a battery in your work laptop, buy some ink for your printer or get other tech gadgets, pc components that you need for work. All that of course is deductible.

II. 8. Other deductibel stuff: In a year, it’s very possible that you’ll have a number of other deductible, work related expenses. Maybe you need a year ticket to commute, connect a business trip with some vacation, get some new furniture for your office room, have some business lunches and stuff like that. Of course this amount is set specifically to have a round income number (60k) but, as far as I can tell, it’s pretty realistic.


While I’m sure that these numbers won’t match exactly any personal situation, I’ve tried not to exagerate on either side income or deductible expenses.

The deductible expenses are not invented just for the sake of pushing the income side up. I think all or at least most of these expenses are happening in most of the cases. You might not have these exact expenses, but you might have other work related stuff.

Anyway, here you go: 60K income. No tax. Even for me, this is quite surprising!

So, what did I miss? Did you find any errors? What else would you include/exclude from this scenario? I’d be glad to hear your comments.