General

Starting January 1, 2026, the procedure for taking contributions to private health insurance and nursing care insurance into account when deducting income tax will be fundamentally modernized. Instead of paper certificates, electronic data exchange between private insurance companies, tax authorities, and employers will take place in the future. One of the goals is to reduce bureaucracy.

Please note:
The regulations do not apply to statutory health insurance, but exclusively to private health insurance and nursing care insurance.

Changes from 2026

Legal basis

The legal basis is provided by the German Federal Tax Code ( ) BMF letter dated JUNE 3, 2025, IV C 5 - S 2363/00047/004/136. 

Overview

Until now, employers have only been allowed to pay tax-free subsidies for private health insurance and nursing care insurance if they have a certificate in accordance with Section 257 of the German Social Code (SGB V ) stating the conditions for tax exemption.

Contributions to private basic health and nursing care insurance are also taken into account in the calculation of income tax via the pension allowance. Here, too, employees had to provide their employer with a certificate proving their deductible contributions, otherwise only the minimum pension allowance was applied.

Procedure 

Due to the high level of bureaucracy involved, there will be electronic data exchange between private insurance companies, the tax authorities, and employers in the future. From January 1, 2026, the previous paper certificates will be replaced by a new electronic procedure that uses the existing data infrastructures of the ELStAM procedure.

1. Transmission of contribution data: Private health and long-term care insurance companies report the relevant contribution data directly to the Federal Central Tax Office (BZSt). Contributions must be rounded up to the nearest full euro and submitted to the BZSt by November 20 at the latest.
2. Data verification and forwarding: The BZSt checks the data received and makes it available to employers via the ELStAM procedure as income tax deduction characteristics. As part of a so-called identity check, the transmitted data is compared with the valid data records stored at the BZSt. ELStAM is usually provided to employers in December for the coming year and applies to the entire calendar year. The monthly contributions for the corresponding year are included.
3. Consideration for income tax deduction: The employer uses the electronically transmitted data directly for payroll tax deduction. A paper certificate is therefore no longer required.

This means that two new ELStAM features will be introduced in the future: 

• Firstly, the amount of monthly contributions to private health insurance and nursing care insurance, provided that a tax-free employer subsidy is possible, and 
• On the other hand, the amount of the monthly private health insurance contributions that are relevant for the tax-free employer subsidy for the lump sum allowance.

Please note:
The new ELStAM features can also be found on the new official form for the 2026 wage tax certificate.

A transitional arrangement applies for the years 2026 and 2027. If electronic data is incorrect or not available for technical reasons, the employer may still use the paper certificate.

Objection to the proceedings

Policyholders may object to the electronic transmission of their premium data. In this case, the data is not provided as an income tax deduction characteristic and cannot be taken into account for income tax deduction. A paper certificate will not be accepted in this case, and the contributions must be taken into account in the income tax assessment.