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Contributions to social security are an essential part of payroll accounting and of the employer's costs for employing employees. Generally, the contributions are divided equally between the employee (Arbeitnehmender [AN]) and the employer (Arbeitgebender [AG]). An exception are certain employer risks, such as accident insurance and continued payment insurance to which only employers contribute.

This article provides an overview of the types of insurance and their assessment bases for employers and employees.

 

Insurance types with mutual contributions

Health insurance

Statutory health insurance (Gesetzliche Krankenversicherung [GKV])

An essential part of the social security network is membership in a health insurance fund. Every year, the legislator sets an annual income limit (Jahresarbeitsentgeltgrenze [JAEG]), also known as Versicherungspflichtgrenze / compulsory insurance limit). This is the amount of the regular annual gross salary up to which an employee is compulsorily insured in statutory health insurance.

Hereby, the general contribution rate is the same across all statutory (public) health insurance providers. To further finance their budgets, the public health insurers may charge a further individual contribution that is in addition to the general contribution. 

More information on Statutory Health Insurance.

 

Contribution distribution (values for 2024)

Contributions are divided equally between employers and employees.
Contribution = (general contribution rate + additional contribution) / 2

Note
The contributions to health insurance only increase up to a fixed gross income limit, the contribution assessment limit. If the monthly gross salary exceeds the contribution assessment limit of €5,175.00 (as of 2024), the contributions will not increase any further.

	Total GKV contribution rate	AG share	AN share	Maximum monthly AG contribution
General contribution rate	14.6%	7.3%	7.3%	€377.78
Reduced contribution rate (applicable to employees who are not entitled to sick pay from statutory health insurance, e.g. recipients of an age pension and are also employed)	14.0%	7.0%	7.0%	€362.25
Additional contribution set by the respective health insurer	Individual by insurer	50% of the insurer's individual contribution rate	50% of the insurer's individual contribution rate	variable

 

Voluntary public health insurance

Employees whose regular gross annual income is above the annual income limit (Jahresarbeitsentgeltgrenze [JAEG]), also known as the compulsory insurance limit do not meet the criteria for compulsory insurance with a statutory health insurance (GKV). They can either take out statutory health insurance voluntarily or switch to private health insurance.

However, the distribution of contributions works exactly as explained above for the statutory insurance.

More information on Voluntary Public Health Insurance.

 

Private health insurance

Employees whose regular gross annual income is above the annual income limit (Jahresarbeitsentgeltgrenze [JAEG]), also known as the compulsory insurance limit do not meet the criteria for compulsory insurance with a statutory health insurance (GKV). They can either take out statutory health insurance voluntarily or switch to private health insurance.

The contribution amount for the private insurance is determined by a contract under private law between the selected private health insurer and the employee. Irrespective of the total contribution agreed, the employer has to pay a tax and social security-free subsidy that is identical to their subsidy for (voluntary) statutory health insurance.

More information on Private Health Insurance.

 

Maximum employer contributions to private health insurance (values for 2024)

The employer's contribution subsidy only increases up to a fixed gross income limit, the contribution assessment limit. This is currently a maximum monthly gross salary of €5,175.00 (as of 2024).

The employer’s maximum contribution subsidy is calculated as follows:
(General GKV contribution rate + average additional GKV contribution / 2 * maximum monthly contribution assessment limit.)

General GKV contribution rate	Average additional GKV contribution	50/50 AG share (total)	Maximum monthly AG contribution
14.6%	1.7%	8.15%	€421.76

Long-term care insurance

Distribution of contributions in statutory long-term care insurance (since 01.01.2019)

All employees in Germany aged 23 or older have to pay an additional surcharge on their contribution. The number of children they have determines how much extra they have to pay. The proportion paid by the employer is 1.7% in all federal states except Saxony. In the federal state of Saxony, employees have to pay a higher proportion of the contribution. This is because Saxony has an additional public holiday: "Buß- und Bettag" (Day of Repentance and Prayer). For the full contribution rate, the employer's share of the contribution is always 1.2% in Saxony.

Number of children	Contribution rates for all federal states except Saxony	Contribution rates for Saxony
Members without children	= 4.00% (employee share: 2.3% + employer share 1.7%)	= 4.1% (employee share: 2.9% + employer share 1.2 %)
Members with one child	= 3.40% (for life) (employee share: 1.7% + employer share 1.7%)	= 3.40% (employee share: 2.2% + employer share 1.2%)
Members with two children	= 3.15% (employee share: 1.45% + employer share 1.7%)	= 3.15% (employee share: 1.95% + employer share 1.2%)
Members with three children	= 2.90% (employee share: 1.2% + employer share 1.7%)	= 2.90% (employee share: 1.7% + employer share 1.2%)
Members with four children	= 2.65% (employee share: 0.95% + employer share 1.7%)	= 2.65% (employee share: 1.45% + employer share 1.2%)
Members with five or more children	= 2.40% (employee share: 0.7% + employer share 1.7%)	= 2.40% (employee share: 1.2% + employer share 1.2%)

These additional contributions apply as long as the children are under 25 years old. Once a child turns 24, the parents lose the benefit for that child.

Visit the website of the Federal Ministry of Health for more information.

Note
The contributions to health insurance only increase up to a fixed gross income limit, the contribution assessment limit. If the monthly gross salary exceeds the contribution assessment limit of €5,175.00 (as of 2024), the contributions will not increase any further.

 

Private long-term care insurance

Employees who have chosen private health insurance must also take out long-term care insurance with a private health insurer which they can freely choose.

The contribution amount is then determined by a contract under private law between the selected private health insurer and the employee. Irrespective of the total contribution agreed, the employer has to pay a tax and social security-free subsidy that is identical to their subsidy for (voluntary) statutory health insurance.

Accordingly, the employer subsidy is determined by the federal state in which the employee is employed.

 

Maximum employer contributions to private care insurance (values for 2024)

The amount of the subsidy is limited to the amount that would have to be paid as the employer's contribution in the case of compulsory insurance in statutory long-term care insurance. The subsidy is capped at half the amount payable by the employee for their private long-term care insurance. The employer's contribution subsidy only increases up to a fixed gross income limit, the contribution assessment limit. This is currently a maximum monthly gross salary of €5,175.00 (as of 2024).

The employer’s maximum contribution subsidy is calculated as follows:
Employer's contribution as per federal state * maximum monthly contribution assessment limit.

Federal state	Employer contribution total as per federal state	Contribution Assessment Ceiling	Maximum monthly AG contribution
All of Germany (except for the federal state of Saxony)	1.7%	€5,175.00	€87.98
Saxony	1.2%	€5,175.00	€62.10

Note
Employees bear the full contribution surcharge for people without children. No subsidy is paid for this.

Pension insurance

Contributions to the statutory pension insurance must be paid for all employees, provided they are not part of occupational groups whose pension insurance is facilitated through their own dedicated pension funds.

Contrary to the contribution assessment limits for health and long-term care insurance, two different contribution assessment limits are applicable for pension insurance:

• Employment in the territory of the former German Democratic Republic (East Germany including East Berlin).
• Employment in the territory of the former Federal Republic of Germany (West Germany including West Berlin).

The contributions to pension insurance are divided equally between employers and employees.

 

Contribution distribution (values for 2024)

Note
The pension insurance contributions only increase up to a fixed gross income limit, the contribution assessment limit. If the monthly gross salary exceeds the contribution assessment limit of €7,450.00 for East Germany or €7,550.00 for West Germany (as of 2024), the contributions will not increase any further.

	Statutory pension insurance contribution rate (total)	AG share	AN share	Maximum monthly AG contribution
East Germany (including East Berlin)	18.6%	9.3%	9.3%	€692.85
West Germany (including West Berlin)	18.6%	9.3%	9.3%	€702.15

Unemployment insurance

Contributions to statutory unemployment insurance must be paid for all employees. The obligation to contribute has to be checked separately for people who through their employment are not granted the right to additional unemployment benefits.

With the unemployment insurance, two different contribution assessment limits also apply:

• Employment in the territory of the former German Democratic Republic (East Germany including East Berlin).
• Employment in the territory of the former Federal Republic of Germany (West Germany including West Berlin).

The unemployment insurance contributions are divided equally between employers and employees.

 

Contribution distribution (values for 2024)

Note
The pension insurance contributions only increase up to a fixed gross income limit, the contribution assessment limit. If the monthly gross salary exceeds the contribution assessment limit of €7,450.00 for East Germany or €7,550.00 for West Germany (as of 2024), the contributions will not increase any further.

	Statutory unemployment insurance contribution rate	AG share	AN share	Maximum monthly AG contribution
East Germany (including East Berlin)	2.6%	1.3%	1.3%	€96.85
West Germany (including West Berlin)	2.6%	1.3%	1.3%	€98.15

Insurance types with employer contributions only

Accident insurance

The statutory accident insurance takes effect in the event of personal injury caused by work performed for the employer. It is not to be confused with private accident insurance which covers personal accidents not related to work.

The statutory accident insurance may apply in situations such as:

• Accidents in the business or at the workplace provided the activity was related.
• Accidents on the commute between home and work, and on business trips.
• Illness as a result of work.

 

Calculation of contributions

Statutory accident insurance contributions are paid solely by the employer. The following factors thereby come into play:

• The remuneration that is subject to contributions
• Risk level
• Contribution base (Beitragsfuß / Umlageziffer)

More information on the calculation of contributions.

Note:
Risk level and contribution base for a company are determined by the relevant employers' liability insurance association who communicates these details to employers. Depending on the frequency of accidents in a company, the association may also apply individual surcharges or discounts.

The contribution is always calculated in the same manner:
Contribution = (remuneration * risk level * contribution base) / 1000

Since the contributions are determined based on the total of remunerations for the entire year, the calculation happens retrospectively. The associations have the right, however, to request advance payments during the course of the year.

Continued payment insurance types (Cost-sharing insurance types)

Continued payment insurances are regulated by law. Participation is mandatory depending on the applicable individual legal provisions and the company's circumstances. Contributions are paid exclusively by the employer. The following continued payment insurances exist:

• U1 contributions – continued payment insurance for sick leave
• U2 contributions – continued payment insurance for maternity protection
• U3 contributions – continued payment insurance for insolvency

For more information and examples, see Continued Payment Insurance Types.