Church Contribution (Kirchenbeitrag)

Definition

Church contributions are deductible under § 18 Abs 1 Z 5 EStG as a special expense (Sonderausgabe), capped at € 600 per year. Important: Sonderausgaben do NOT work like tax credits. They reduce the tax base, so the tax saving equals the marginal rate (e.g. at 40 % marginal: € 600 special expense = € 240 less tax).

Effect by marginal rate

Example: €500/yr church contribution

Person pays €500/yr in church contributions, fully deductible (below the € 600 cap). At taxable income €50,000 (marginal rate 40 %): actual tax saving €500 × 40 % = €200. At lower income and marginal rate 30 %: €500 × 30 % = €150. The tax base shrinks; tax doesn't drop €1-for-€1.

See also

• Union contribution , Werbungskosten (not a Sonderausgabe), different deduction mechanism.
• Einkommensteuertarif , how the marginal rate emerges from the bracket structure.