Germany Savings Allowance Guide (Sparerpauschbetrag & Freistellungsauftrag)

The Sparerpauschbetrag is Germany's tax-free allowance for investment income: €1,000 per person (€2,000 for married couples filing jointly). It covers dividends, interest, realised capital gains from funds/ETFs, and capital gains from share sales. To use it, submit a Freistellungsauftrag (exemption order) to your bank or broker. Without one, the bank withholds 25% Abgeltungsteuer + Soli on every euro, and you must claim the overpaid tax back through your Steuererklärung.

The Sparerpauschbetrag was raised from €801 to €1,000 (single) on 1 January 2023 (€1,602 to €2,000 for married couples). It is a combined allowance for all investment income types — dividends, interest, realised capital gains from fund sales, and gains from share sales. It is not per account but per person: if you have multiple brokers, you must split your total allowance across them via separate Freistellungsaufträge. For related reading, see our Capital Gains Tax Guide → and Dividend Tax Guide →.

How to File a Freistellungsauftrag

Submit to each broker: You can file a Freistellungsauftrag with your German bank, broker, or Neobroker (Trade Republic, Scalable Capital, etc.) specifying the amount of allowance you want them to apply. Most brokers allow online submission in your account settings. You can split your total allowance across multiple accounts — e.g., €500 at Broker A, €500 at Broker B.
What it covers: The Freistellungsauftrag covers Kapitalerträge (investment income) including: dividend payments, interest on savings and bonds, realised gains from the sale of shares, funds, and ETFs, and distributions from investment funds. If your total income across all accounts exceeds the allowance, the excess is taxed at 25% + Soli.
Without a Freistellungsauftrag: If you do not submit a Freistellungsauftrag, the bank withholds 25% + Soli (and church tax if applicable) on all your investment income starting from the first euro. You can still reclaim the overpaid tax by filing a Steuererklärung (Anlage KAP), but this is more work and delays your refund.
Changing or revoking: You can change or revoke your Freistellungsauftrag at any time. If you open a new broker account mid-year, you can adjust the allocation across your accounts. The sum of all your Freistellungsaufträge must not exceed your personal allowance (€1,000 or €2,000).

Key Considerations and Strategies

Non-veranlagte (NV) Bescheinigung: If you have very low income and expect your tax liability to be zero, you can apply for an NV-Bescheinigung (non-assessment certificate) from your Finanzamt. Present this to your bank, and they will not withhold any tax on your investment income at all — no need for a Freistellungsauftrag.
Loss offsetting and the allowance: The Sparerpauschbetrag is applied before loss carryforwards. If you have realised gains and losses, the allowance reduces the net gain. Losses from share sales (Aktienverlusttopf) are offset against gains before the allowance is applied. Any unused allowance does not carry forward to the next year.
Married couples: Each spouse has their own €1,000 allowance. If you hold a joint account, both allowances can be applied — the bank can apply €2,000 total (€1,000 per person) on a single joint Freistellungsauftrag. For separate accounts, each spouse applies their own.