Kinderfreibetrag vs Kindergeld: Which Wins in Germany?

You have children and receive Kindergeld (child benefit) every month. Then you read about the Kinderfreibetrag (child tax allowance) somewhere and wonder: Do I get that on top? Do I have to choose? Am I losing money if I tick the wrong box? The good news: you can barely go wrong here, because the tax office decides for you. The less good news: if you skip the Anlage Kind (child annex), you still leave real money behind at higher incomes.

In short: Kindergeld (child benefit — €255/month per child since 2025, so €3,060/year) and the Kinderfreibetrag (child tax allowance — around €9,600 per child in 2026, § 32 EStG) are two routes to the same family support, not both at once. The Finanzamt (tax office) runs the Günstigerprüfung — a “more-favourable check” (§ 31 EStG): it automatically calculates which gives you more and applies the better one. At lower and middle incomes, child benefit usually wins; at higher incomes, the allowance does. You decide nothing — you just file the Anlage Kind.

Two routes, one goal: the child’s basic tax-free amount

Germany keeps each child’s basic needs free of tax. It does this through two instruments that serve the same purpose:

• Kindergeld (child benefit) — the monthly payment from the Familienkasse (family benefits office). It lands in your account immediately, regardless of your income.
• Kinderfreibetrag (child tax allowance) — an amount deducted from your income when your tax is calculated, so part of your income stays tax-free.

You don’t get both. The law calls this the Familienleistungsausgleich (family benefit equalisation, § 31 EStG): the child benefit is an advance on the tax exemption. At year-end, the Finanzamt checks which route is better for you.

Kindergeld 2026: €255 per child per month

Since 1 January 2025, Kindergeld has been €255 per month per child — the same for every child, first or fourth. That’s €3,060 per year per child.

Key points:

• You apply for Kindergeld once at the Familienkasse (not in your tax return).
• It’s paid monthly, regardless of income.
• For children over 18, special rules apply (vocational training, university, transition periods).

For most families, Kindergeld is the more tangible benefit: it arrives immediately and regularly.

Kinderfreibetrag 2026: around €9,600 per child

The Kinderfreibetrag under § 32 (6) EStG has two parts:

1. The actual child allowance for the child’s basic material needs.
2. The BEA allowance for care, upbringing, and education (Betreuung, Erziehung, Ausbildung).

Together, in 2026 they come to around €9,600 per child — for both parents combined. Jointly assessed parents get the full amount. Separated or unmarried parents each get half, so around €4,800.

Unlike Kindergeld, the allowance isn’t cash in your account — it’s a reduction of your taxable income. So how much it’s worth depends directly on your marginal tax rate: the higher your income, the more tax you save per euro deducted.

The Günstigerprüfung: the tax office does the math

Here’s the crucial point: you don’t have to choose. Once you file the Anlage Kind, the Finanzamt automatically runs the Günstigerprüfung:

1. It calculates your tax with the child tax allowance deducted.
2. It compares the resulting saving with your child benefit entitlement (the amount you were entitled to, not necessarily what was paid out).
3. It applies the more favourable route.

If Kindergeld wins, nothing changes — you keep the €3,060 per child. If the allowance wins, the Finanzamt deducts it but adds the child benefit back (the “Hinzurechnung”). So you end up with only the extra benefit beyond the child benefit.

When does the child tax allowance win?

Let’s find the threshold. Kindergeld is worth €3,060 per child per year. The allowance is worth €9,600 × your marginal rate. So the allowance only beats child benefit once your marginal rate exceeds roughly 32%.

In practice, that’s roughly:

• Married, one child: from around €68,000 of taxable income
• Single, one child: from around €34,000 of taxable income

The exact threshold shifts with the number of children and your wider tax situation — but you don’t have to calculate it. The Finanzamt does.

Worked example: two incomes compared

Example 1: middle income

Anna and Ben, married, one child, €48,000 taxable income combined.

• Kindergeld received: 12 × €255 = €3,060
• Child tax allowance: €9,600 × ~25% marginal rate = about €2,400 saved
• Günstigerprüfung: €3,060 > €2,400 → child benefit wins
• Result: they keep the €3,060 Kindergeld; the allowance is not deducted for income tax.

Example 2: higher income

Clara and David, married, one child, €110,000 taxable income combined.

• Kindergeld received: €3,060
• Child tax allowance: €9,600 × ~40% marginal rate = about €3,840 saved
• Günstigerprüfung: €3,840 > €3,060 → allowance wins
• The Finanzamt deducts the €9,600 but adds the €3,060 child benefit back
• Result: about €780 extra via the tax return, on top of the child benefit already received.

The difference: Anna and Ben get their full benefit monthly through Kindergeld. Clara and David get the remainder only through their tax assessment — but only if they filed the Anlage Kind.

The quiet bonus: solidarity surcharge and church tax

An often-overlooked point: for the solidarity surcharge (Solidaritätszuschlag) and church tax (Kirchensteuer), the child tax allowance is always applied — regardless of who wins the income-tax Günstigerprüfung. So even if child benefit is more favourable and the allowance isn’t used for income tax, it still lowers the base for these two. That’s why filing the Anlage Kind almost always pays off.

Where you enter it: the Anlage Kind

For each child you file a separate Anlage Kind (child annex), stating:

• the child’s name and date of birth
• whether and how long you received Kindergeld
• for children over 18: training, university, or transition periods
• for separated parents: how the allowances are split

You apply for Kindergeld itself at the Familienkasse, not in your tax return. The Günstigerprüfung then runs automatically. In ELSTER, Germany’s official online tax-filing portal, the Anlage Kind sits among the income-tax return forms.

Families are usually employees — our overview for employees covers more levers to raise your net pay. And if one parent is self-employed, the page for freelancers is worth a look.

Common mistakes

1. Not filing the Anlage Kind at all. Without it, the Finanzamt checks nothing — you lose the allowance at higher incomes, and the surcharge/church-tax benefit at any income.
2. Assuming you get both. Child benefit and allowance are mutually exclusive for income tax.
3. Not applying for Kindergeld. The check uses your child benefit entitlement — skip the application and it’s still counted against you.
4. Splitting the allowance wrong when separated. The default is half each; a transfer is possible under conditions.
5. Forgetting children over 18. In training or at university, Kindergeld and the allowance continue — but only with the right details filed.

How Restio helps

Child allowance vs. child benefit is a calculation-and-form task — exactly where Restio is strong:

• Scan documents — photograph your Kindergeld notice from the Familienkasse, and Restio captures the details for the Anlage Kind.
• Tax questions with the paragraph and the number — ask “Does the child tax allowance pay off for us?” or “How high is the allowance per child in 2026?” and get an answer with the § and a concrete figure, in English or German.
• Deadline watcher — Restio reminds you of the filing deadline in good time, so you don’t miss the benefit.

More on the Restio homepage.

Get Restio and keep track of every child benefit you’re owed.

Bottom line

Child tax allowance or child benefit — that’s not a decision you have to make. The Finanzamt runs the Günstigerprüfung automatically and picks the better one. At lower and middle incomes that’s usually Kindergeld (€3,060 per child); at higher incomes it’s the allowance (around €9,600 per child). Your only job: file the Anlage Kind. Skip it and you forfeit the extra benefit at higher incomes — and the surcharge and church-tax saving at any income.

Further reading

• § 31 EStG — family benefit equalisation (Günstigerprüfung)
• § 32 EStG — child tax allowance and BEA allowance
• ELSTER: the Anlage Kind for your income-tax return