Enhanced social payments mandated for high-earning employees starting from 2026

In a move that is set to impact the pockets of many employees, the contribution assessment ceiling in both statutory pension insurance and health insurance will increase starting from January 1, 2026.

The contribution assessment ceiling in the statutory pension insurance will rise from the current 8,050 euros per month to 8,450 euros per month. Similarly, in the statutory health insurance, the ceiling will increase from 5,512.50 euros per month to 5,812.50 euros per month. These changes mean that only income up to these amounts will be considered for the calculation of contributions to the respective systems of old-age provision and health insurance.

Janosch Dahmen, the Green Party's health policy spokesman, has called for an increase in the contribution assessment ceiling "step by step to the level of statutory pension insurance," alongside structural reforms. On the other hand, Dennis Radtke (CDU), chairman of the German Christian Democratic Workers' Association, states that the federal government has little room for maneuver in raising social benefits limits.

Reiner Holznagel, president of the German Taxpayers' Association, advocates cuts in social benefits instead of always raising limits. Christos Pantazis, the SPD's health expert, suggested that high earners should pay more into the statutory health insurance and advocated an increase in the contribution assessment ceiling by around 2,500 euros.

The total contribution to health insurance, shared between employees and employers, remains a uniform rate of 14.6% of gross wages. However, each health insurance fund sets the concrete additional contribution based on its financial situation for its insured. The average additional contributions for statutory health insurance rose to 2.9% at the beginning of the year.

The expenditure of the approximately 90 health insurance funds in the first half of the year increased by 7.95% to 166.1 billion euros. The figures from the GKV association show an increase in the expenditure of the health insurance funds, a trend that may be influenced by the rise in contribution assessment ceilings.

However, it's important to note that income above the contribution assessment ceiling in the pension insurance is not taken into account for the calculation of pension insurance contributions. This means that while the ceiling increase may affect the contributions of high earners, it will not impact their pension benefits.

The compulsory insurance threshold in the statutory health insurance will increase from the current 6,150 euros of gross monthly income to 6,450 euros in 2026. This means that employees earning above this threshold will be required to contribute to health insurance.

Many employees are reportedly fed up because they hardly get anywhere despite hard work. The rise in social insurance contribution limits may add to their frustrations, as it could potentially lead to an increase in additional contributions in the statutory health insurance, which could affect many employees doubly.

As the changes approach, it remains to be seen how they will impact the overall financial situation of employees and the healthcare and pension systems in Germany. The debates surrounding these issues are likely to continue in the coming months.