German 2026 Legislative Changes: Business Relief, Wage Increases, and Sustainable Transport Innovations

Starting January 1, 2026, German businesses and workers will experience significant legislative changes designed to stimulate the economy, reduce administrative burdens, and promote sustainability. The coalition government aims to cut bureaucracy by 25%, delivering an economic relief package worth €16 billion, according to a report from Handwerksblatt. Businesses will benefit from streamlined processes and accelerated digitization efforts, including a digital handcraft card to ease administrative tasks.

Among the notable reforms, the statutory minimum wage will rise to €13.90 per hour in 2026, with a planned increase to €14.60 in 2027. Tax regulation adjustments will raise the individual basic allowance to €12,348 annually while the CO2 tax on heating fuels will be set between €55 and €65 per ton, increasing heating costs for oil and gas systems. Sustainability reporting requirements will become stricter for larger companies, though small and medium-sized enterprises will benefit from a voluntary standard.

Complementing these reforms, a significant DLR study highlights the economic benefits of cargo bikes and electric light vehicles (LEVs) for companies. Over a four-year project involving 40 enterprises from craft, trade, and logistics sectors, vehicles drove collectively more than 100,000 kilometers. The research underscored benefits such as reduced emissions, noise, and urban congestion. Dr. Johannes Gruber, project leader, emphasized tailoring vehicle selection and deployment to a company’s specific needs and identified six success factors including organizational involvement and thorough economic calculation.

To assist businesses with this transition, the DLR has introduced an online calculator and checklist to assess the viability of integrating cargo bikes into logistics fleets. This innovation aligns with Germany’s broader sustainability goals and business modernization efforts.

These comprehensive legislative changes symbolize a government commitment to ease operational costs, support workers with wage growth, and encourage greener corporate practices, positioning German companies for a more sustainable and efficient future.