# ALG 1 Calculation Formulas - 2026

**Last Updated:** 2026-01-21

## Legal Basis

All calculations are based on:

- **SGB III §127**: Anspruchsdauer (Duration of entitlement)
- **SGB III §150**: Höhe des Arbeitslosengeldes (Amount of unemployment benefit)
- **SGB III §157**: Nebenverdienst während des Bezugs (Side income during benefit receipt)

## Constants (2026)

### Höchstbeträge (Maximum Amounts)

- **Westdeutschland:** 2.390 €/Monat
- **Ostdeutschland:** 2.320 €/Monat

### Leistungssätze (Benefit Rates)

- **Ohne Kinder:** 60% des Nettoeinkommens
- **Mit Kindern:** 67% des Nettoeinkommens

### Nebenverdienst-Freibetrag

- **Freibetrag:** 165 €/Monat
- **Anrechnung:** 20% des ALG 1 pro 100€ über dem Freibetrag (discrete steps)
- **Maximale Anrechnung:** 80% des ALG 1

## Duration Calculation Formula (SGB III §127)

**IMPORTANT:** Duration is NOT affected by children (hasChildren). Duration depends ONLY on employment months and age.

### Formula

```
Base Duration = min(floor(Beschäftigungsmonate / 2), 12)
Age Increase = (age >= 50) ? min((age - 50) * 2, 12) : 0
Final Duration = min(Base Duration + Age Increase, 24)
```

**Why children doesn't affect duration:**

- Per SGB III §127, Anspruchsdauer depends on Beschäftigungsdauer and Alter only
- Children status is not a factor in duration calculation
- Children only affects the benefit rate (Leistungssatz) per SGB III §150

### Examples

| Beschäftigungsmonate | Alter | Base Duration | Age Increase | Final Duration |
| -------------------- | ----- | ------------- | ------------ | -------------- |
| 12                   | 35    | 6             | 0            | 6              |
| 18                   | 35    | 9             | 0            | 9              |
| 24                   | 35    | 12            | 0            | 12             |
| 24                   | 50    | 12            | 0            | 12             |
| 24                   | 55    | 12            | 10           | 22             |
| 24                   | 58    | 12            | 12           | 24             |
| 24                   | 60    | 12            | 12           | 24 (capped)    |

### Rules

- Minimum employment: 12 months in last 2 years (required for entitlement)
- Base duration: Employment months ÷ 2, minimum 6, maximum 12 (for age < 50)
- Age 50+: Add 2 months per year over 50, maximum 12 additional months
- Maximum total duration: 24 months

## Amount Calculation Formula (SGB III §150)

### Step 1: Netto Income Calculation

**If input is Brutto:**

```
Netto Income = Brutto Income × 0.80
```

_Note: Actual conversion varies by tax class. This is a simplified approximation based on 20% deduction for taxes and social security._

**If input is Netto:**

```
Netto Income = Input Value
```

### Step 2: Base ALG 1 Calculation

```
Leistungssatz = (hasChildren) ? 67% : 60%
Base ALG 1 = Netto Income × (Leistungssatz / 100)
```

**Children Impact:**

- **With children:** Leistungssatz = 67% → Base ALG 1 = Netto × 0.67
- **Without children:** Leistungssatz = 60% → Base ALG 1 = Netto × 0.60
- **Example:** 2000€ netto → 1200€ (no children) vs 1340€ (with children) = +140€ difference
- **Note:** Children does NOT affect duration, maximum cap, or side income calculation rules (but side income reduction is based on baseALG, so it indirectly increases with children)

### Step 3: Maximum Cap Application

```
Max ALG = (region === 'west') ? 2390 : 2320
Capped ALG = min(Base ALG 1, Max ALG)
```

### Step 4: Side Income Reduction (if applicable)

See Side Income Calculation Formula below.

### Step 5: Final ALG 1 Amount

```
Final ALG 1 = Capped ALG - Side Income Reduction
```

### Examples

| Netto Income | Has Children | Region | Base ALG 1 | Capped ALG | Final ALG 1   |
| ------------ | ------------ | ------ | ---------- | ---------- | ------------- |
| 2000         | No           | West   | 1200       | 1200       | 1200          |
| 2000         | Yes          | West   | 1340       | 1340       | 1340          |
| 5000         | No           | West   | 3000       | 2390       | 2390 (capped) |
| 5000         | No           | East   | 3000       | 2320       | 2320 (capped) |

## Side Income Calculation Formula (SGB III §157)

### Formula

```
Freibetrag = 165 €
Excess = max(Side Income - Freibetrag, 0)
Reduction Steps = floor(Excess / 100)  // Discrete 100€ steps
Reduction Percentage = Reduction Steps × 20%
Reduction Amount = Base ALG 1 × Reduction Percentage
Max Reduction = Base ALG 1 × 80%
Final Reduction = min(Reduction Amount, Max Reduction)
Final ALG 1 = Base ALG 1 - Final Reduction
```

### Examples

| Side Income | Excess | Steps | Reduction % | Base ALG 1 | Reduction | Final ALG 1         |
| ----------- | ------ | ----- | ----------- | ---------- | --------- | ------------------- |
| 100         | 0      | 0     | 0%          | 1200       | 0         | 1200                |
| 165         | 0      | 0     | 0%          | 1200       | 0         | 1200                |
| 166         | 1      | 0     | 0%          | 1200       | 0         | 1200                |
| 264         | 99     | 0     | 0%          | 1200       | 0         | 1200                |
| 265         | 100    | 1     | 20%         | 1200       | 240       | 960                 |
| 365         | 200    | 2     | 40%         | 1200       | 480       | 720                 |
| 565         | 400    | 4     | 80%         | 1200       | 960       | 240 (max)           |
| 1000        | 835    | 8     | 160%        | 1200       | 960       | 240 (capped at 80%) |

### Key Points

- **Discrete Steps:** Reduction calculated in discrete 100€ steps (uses `floor()`)
- **Freibetrag:** First 165€ are not counted
- **Per Step:** Each 100€ over Freibetrag = 20% reduction
- **Maximum:** Reduction cannot exceed 80% of Base ALG 1

## Brutto to Netto Conversion

### Simplified Formula

```
Netto Income = Brutto Income × 0.80
```

### Actual Calculation (Bemessungsentgelt)

The actual calculation uses Bemessungsentgelt, which:

1. Takes average Brutto income of last 12 months
2. Divides by 365 days to get daily Bemessungsentgelt
3. Applies pauschal 20% deduction for:
   - Social security contributions
   - Income tax
   - Solidarity surcharge
4. Result is daily Netto (Leistungsentgelt)

**Note:** Our calculator uses a simplified monthly approximation (80% conversion rate). Actual conversion varies by:

- Tax class (Steuerklasse I-VI)
- Social security contributions
- Additional deductions

For precise calculations, consult the Bundesagentur für Arbeit.

## Edge Cases

### Employment Months < 12

- **Result:** No entitlement to ALG 1
- **Error Message:** "Du musst mindestens 12 Monate in den letzten 2 Jahren versicherungspflichtig beschäftigt gewesen sein, um Anspruch auf ALG 1 zu haben."

### Employment Months Not Specified

- **Default:** Assumes 24 months employment (for backward compatibility)
- **Duration:** Calculated as if 24 months employment

### Side Income = 0 or Empty

- **Result:** No reduction applied
- **Final ALG 1:** Equals Capped ALG

### Side Income Exactly at Freibetrag (165€)

- **Result:** No reduction (below threshold)
- **Final ALG 1:** Equals Base ALG 1

### High Side Income (Causing >80% Reduction)

- **Result:** Reduction capped at 80% of Base ALG 1
- **Final ALG 1:** Minimum 20% of Base ALG 1

## Validation Rules

### Income

- Must be > 0
- Must be ≤ 10,000 € (realistic maximum)

### Age

- Must be between 16 and 67 years

### Employment Months

- Must be between 0 and 24 months (if specified)
- Minimum 12 months required for entitlement

### Side Income

- Must be ≥ 0 (if specified)

## Sources

- Bundesagentur für Arbeit: Arbeitslosengeld Berechnung
- SGB III (Sozialgesetzbuch Drittes Buch)
- Arbeitslosenselbsthilfe.org: Höhe des Arbeitslosengeldes 1
- See `alg1-legal-research-2025.md` for detailed legal research