What the 2021 reform changed
Since 2021 the surcharge is only charged once your income tax exceeds a generous exemption threshold, which is adjusted periodically. For ordinary employees this means the deduction has simply vanished from the payslip.
Above the threshold the surcharge does not appear all at once. A sliding zone phases it in gradually, and only well above the threshold does the full rate of 5.5% of your income tax apply.
Where it still applies in full
Two areas were left untouched by the reform, and both matter to investors and founders.
- Capital income taxed at source: the flat withholding tax on interest, dividends and securities gains carries the full surcharge regardless of your income level.
- Corporations: corporate income tax is subject to the full surcharge, so a GmbH pays it on its profits.
What this means in practice
For an employee below the threshold, nothing to do — the payslip already reflects it. For high earners near the sliding zone, timing a bonus or a one-off payment across two calendar years can change whether the surcharge applies at all.
For founders, the surcharge is part of the comparison between salary and dividend, alongside corporate tax, trade tax and the withholding tax on distributions. It rarely decides the question on its own, but it belongs in the calculation.
Frequently asked
Do I still pay the solidarity surcharge as an employee?
Most employees do not. It only applies once your income tax passes the exemption threshold, and it phases in gradually above it.
Why does my broker still deduct the Soli?
The surcharge on flat-rate withholding tax on capital income was not abolished and is charged in full, independently of your salary.
Does my GmbH pay it?
Yes. Corporate income tax carries the full 5.5% surcharge, which is one reason the salary-versus-dividend comparison needs to be run properly.
This guide is general information on German tax law, not advice on your individual case. Rules and figures change with each tax year.