Higher CO2 price, more taxes - this is how much more expensive 2024 will be

Consumers - Higher CO2 price, more taxes - this is how much more expensive 2024 will be

The wallets of many consumers are in for a grueling year. The CO2 tax is rising from 30 to 45 euros. This will make filling up and heating with oil and gas more expensive. Restaurant meals will cost more: due to the increase in VAT to 19 percent, diners will have to pay more for schnitzel and the like. This is offset by income tax relief. However, this is hardly enough to offset the additional costs, especially for low and average earners.

Fuel prices already higher before the turn of the year

At the turn of the year, the CO2 price for fossil fuels rose from 30 to 45 euros per ton. According to the ADAC, this will lead to a price increase of 4.7 cents per liter at the pump for anyone with a diesel car. Anyone filling up with premium gasoline will have to expect around 4.3 cents more per liter. This is still hardly noticeable: in December, the average price for a liter of diesel was around 169.5 cents and prices remained at a similar level in the first few days of the year.

"Compared to the previous week, the price of diesel has risen by 1 cent, while Super E10 costs an average of 2.1 cents more," says ADAC press spokesman Alexander Schnaars on request. However, the CO2 price is not the only factor influencing fuel prices. They are primarily based on crude oil prices, which have recently fallen. Fuel prices, on the other hand, remain constant. This suggests that many petrol station operators have already increased their prices before the turn of the year. "We therefore currently see no basis for further significant increases in the price of petrol and diesel," says Schnaars. In addition, fuel prices fluctuate over the course of the day. A study by the ADAC found that petrol stations regularly charge higher prices in the morning than in the evening. If you fill up late in the day, you can save up to 9 cents per liter.

As fossil fuels are particularly harmful to the environment, their use has cost extra since 2021: the national CO2 price for climate-damaging material started at 25 euros per tonne of carbon dioxide emitted and is to increase gradually each year. The German government suspended the increase planned for last year due to the energy crisis. However, it is now raising the price all the more, partly because it had to plug its budget deficit of around 17 billion euros.

Heating

The CO2 price is also due for heating oil and natural gas, even if consumers do not find such an item on their bill. This is because the CO2 surcharge is paid by fuel traders and producers. They have to buy an emissions certificate from the German Emissions Trading Authority of the Federal Environment Agency. However, the traders then pass the levy on to the consumer. The bill from the gas supplier then states, for example, what CO2 costs are included for the carbon dioxide released and how high the emission factor is. Heating oil produces around 2.68 kilograms per liter. As heating oil customers have to replenish their tanks independently and regularly, the CO2 price makes their bill more expensive. According to the comparison portal Check24, an annual consumption of 2000 liters will cost 238.47 euros. This corresponds to additional costs of around 80 euros.

For those who heat with gas, several price increases add up: Check24 has calculated that an average four-person household with a gas consumption of 20,000 kWh per year will now have to pay a CO2 levy of 180 euros - 60 euros more than in 2023. In addition, the gas price brake was abolished on January 1. This caused additional costs of 90 euros. Another price driver is VAT, which will be raised again for gas from 7 to 19 percent. This will add another 217 euros to the bill. The bottom line is that a family of four can expect to pay 370 euros more for gas.

However, the all-clear has been given for all those who heat with wood, pellets or sustainable biogas or who use solar thermal energy or a heat pump. They will be spared the CO2 levy.

Electricity: charges make bills more expensive

Electricity costs will also place a greater burden on household budgets. The electricity price brake expired on January 1, 2024. This can lead to additional costs for anyone with an expensive tariff. The end of the price brake should hardly be noticeable at present, even in the basic supply, which tends to be expensive: According to Check24, electricity prices in January 2024 are 29.73 cents per kilowatt hour (kWh) gross for a consumption of 5,000 KWh and therefore well below the limit at which the electricity price brake would have applied at all.

More serious is the fact that the operators of the electricity transmission grids in Germany doubled the fees for grid usage to an average of 6.43 cents per kilowatt hour at the turn of the year. Due to the budget situation, the German government had to cut subsidies that were intended to stabilize transmission grid fees. Instead, consumers now have to pay more. For an average household with an annual consumption of 5,000 kilowatt hours, the electricity bill will therefore increase by more than 150 euros.

Value added tax goes up

If you eat out, you will have to dig deeper into your wallet than usual. Since January 1, the VAT rate for restaurant meals has been back to the regular 19 percent. Food retailers, bakeries and butchers also have to charge this tax rate when their guests enjoy coffee and bread rolls on site. During the coronavirus pandemic, VAT was temporarily reduced to 7%. The lower tax rate otherwise only applies to takeaway food.

The tax turnaround is certainly noticeable on the bill at your favorite Italian restaurant. While a pizza used to cost 12.90 euros with 7 percent VAT, the tax change to 19 percent alone means that 14.35 euros will be due in future. In addition, many restaurateurs have already raised the prices of their dishes in recent months due to the energy crisis and inflation. Now there is a threat of further price increases.

You can find further calculation examples here

Health insurance: higher contributions

The cost of statutory health insurance will once again increase significantly for insured persons in 2024. The contribution assessment ceiling will rise from 59,850 euros to 62,100 euros. The limit marks the maximum gross income up to which statutory health and long-term care insurance levies contributions. If insured persons earn more, the excess income remains non-contributory.

The legislator is also increasing the average additional contribution from 1.6 to 1.7 percent. This value indicates how high the additional contribution would have to be on average for the health insurance funds to be able to cover their financial requirements. However, the health insurance funds can set the exact amount of the additional contribution themselves. For some, this can be significantly higher than the average. AOK Nordost, for example, has increased its supplementary contribution from 1.9 percent to 2.7 percent. The additional contributions of Bahn-BKK and Knappschaft have also increased and now stand at 2.2 percent. If you want to save money here, you can switch to a health insurance fund with a lower supplementary contribution. If the additional contribution increases in January 2024, insured persons have a special right of termination until January 31.

Tax burdens instead of relief

All of this is offset by income tax relief. The basic tax-free allowance, up to which no tax is due, will be raised from €10,908 to €11,604 in 2024 - a reduction of €696. The top tax rate of 42% will only apply from EUR 66,761 instead of EUR 62,810 and legislators have adjusted the tax rate in line with inflation.

However, new calculations by the German Economic Institute (IW) show that the tax benefits are rarely sufficient to offset the additional costs. Low and average earners in particular have to pay more to the state. A single person with an annual gross income of 50,000 euros will pay a total of 40 euros more in taxes and duties in 2024. It will be particularly expensive for single parents with one child. With an annual gross income of less than 36,000 euros, the bottom line is a minus of 144 euros. Even with an annual income of 72,000 euros, the relief for a single parent is low at 42 euros. High earners are more likely to benefit: a family with two children and a joint gross annual income of 130,000 euros comes away with a plus of 262 euros at the end of the year.

Capital".