Germany Implements Major Economic and Regulatory Changes for 2026 Affecting Businesses, Workers, and Retirees

As of January 1, 2026, Germany is set to enact comprehensive economic and regulatory changes with significant impacts on businesses, employees, retirees, and specific sectors. The German coalition government announced a plan to reduce bureaucracy, aiming to relieve the economy by 25%, which translates to approximately 16 billion euros. This move aims to rejuvenate economic activity, though skepticism remains among business communities regarding the government's ability to fully deliver on these promises.

Key changes include an increase in the minimum wage to 13.90 euros per hour, with a further rise to 14.60 euros anticipated in 2027. The 'Aktivrente' law will allow retirees continuing work beyond retirement to earn up to 2,000 euros tax-free; however, this benefit excludes self-employed individuals. Public transportation will see a price increase for the Germany ticket, rising from 58 to 63 euros monthly, alongside new ticket options specifically designed for apprentices and students.

In environmental regulations, the introduction of a fuel emissions trading scheme (Brennstoffemissionshandel) will affect companies required to purchase certificates under the scheme. Details regarding which fuels are included and the scheme's implementation are being finalized, with the DIHK committing to regularly update guidance for businesses.

Additional legislative reforms targeting construction law aim to enhance energy efficiency and sustainability. Adjustments to the CO2 tax on heating fuels will also raise consumer costs. Further regulations are anticipated in sectors such as financial services, healthcare, and social welfare, reflecting the broad scope of 2026’s regulatory overhaul.