Active pension 2026: Continue working tax-free after retirement - what applies now

With the so-called active pension, the legislator created a new option on January 1, 2026 to make the transition from working life to retirement more flexible. Employees who have reached the standard retirement age can continue to work and receive a significant portion of their income tax-free. This opens up new opportunities for employees and employers - but also raises legal questions regarding the actual implementation.

What is behind the active pension

The active pension is not a new type of pension, but a tax-free allowance for employees of retirement age. Anyone who has reached the standard retirement age and is still in employment subject to social security contributions can earn up to EUR 2,000 per month tax-free. Only the part of the salary above this amount is subject to normal income tax. Social security contributions, in particular for health and long-term care insurance, continue to apply.

The tax advantage is already taken into account in the wage tax deduction, so that employees benefit directly from a higher net income. The statutory pension itself remains unaffected by the regulation.

Who can use the active pension

The prerequisite is that the statutory retirement age has been reached and the employment is subject to social insurance contributions. It does not cover self-employment, purely marginal employment or employment outside the social security system. The active pension is therefore primarily aimed at employees who wish to continue working in their current or a new employment relationship after retirement.

Implementation of labor law in practice

Many employment contracts stipulate that the employment relationship ends automatically when the standard retirement age is reached. If employment is to be continued, an extension must therefore be agreed in good time or a new employment contract must be concluded. In practice, fixed-term follow-up contracts are often used for this purpose in order to provide both the employee and the employer with flexibility.

For employers, it is important that continued employment is planned in good time and implemented properly in the contract. Questions regarding working hours, remuneration and the area of employment must also be clarified.

Advantages for employees and employers

For employees, the active pension primarily means more financial freedom in retirement. The tax-free additional income can significantly increase the monthly income without increasing the tax burden to the same extent. At the same time, there is still the option of gradually withdrawing from working life instead of stopping completely from one day to the next.

Employers benefit from the fact that experienced specialists can stay with the company for longer. Especially in times of skills shortages, this can be a decisive advantage when it comes to retaining knowledge within the company and avoiding staff shortages.

Conclusion on the active pension from 2026

The active pension opens up new scope for a smooth transition into retirement. Employees can improve their financial situation in old age, while employers can fall back on proven and qualified employees. However, it is crucial that continued employment is planned in good time and properly structured in terms of employment law. Early legal advice can help to avoid typical mistakes and make the most of the benefits of active retirement.