German workers could pay 48,6 percent of income to social security by 2035

German workers could pay 48,6 percent of income to social security by 2035

Unless new policies are implemented, employees in Germany could be paying through the nose for social security services in the next 10 years, a new study by IGES Institut in Berlin has found.

48,6 percent of monthly wages could go to social security by 2035

The regular contributions that workers in Germany pay towards the social security system (Sozialversicherungssystem) are set to shoot up unless better funded via state subsidies, a study by the Berlin IGES Institut has found.

To make the calculations, the IGES assumed average values for the determining factors impacting contribution rates - births, life expectancy, migration and the development of salaries.

According to the study, the best-case scenario would see workers pay 17,7 percent of their monthly income before tax towards health insurance contributions by 2035; 21,8 percent would be paid towards pensions and 3,5 percent to long-term care insurance

In the least-favourable scenario, these rates would rise to 20,6 percent for health insurance, 22,7 percent for pension contributions and 4,7 percent of workers’ monthly income before tax (Bruttoeinkommen) for long-term care contributions.

In the best-case scenario, employees would already be paying a total of 45,8 percent of their Bruttoeinkommen towards social security contributions, and in the worst case, 51,2 percent, both of which would overstep the “40 prozent Sozialgarantie” (40 percent social guarantee) promised by Angela Merkel. In between these two, is the so-called "Basis-Szenario", where workers would be paying 48,6 percent of their monthly income before tax.

Employees in Germany currently pay 14,6 percent of their Bruttoeinkommen towards health insurance, with 7,3 percent of this contribution paid by their employer. The statutory pension contribution is currently 18,7 percent of the Bruttoeinkommen (9,35 percent each for employee and employer). For long-term care insurance, contributions vary between 2,4 percent and 3,4 percent depending on the insured person’s age and if they have children, but employers always contribute the first 1,7 percent.

DAK-Gesundheit calls on government to better subsidise insurers

With the study conducted by IGES on behalf of DAK-Gesundheit, a statutory health insurance provider, DAK representative Andreas Storm used its findings as a reason to push for more tax funding for the social security system and said that the 40 percent cap named by Merkel was now unrealistic.

Storm called for a “stability pact” for statutory health insurance providers and made three suggestions for the plan. The first suggestion is that insurance companies be reimbursed by the German government for covering the health insurance costs of those on Bürgergeld citizens’ allowance while they are out of work. 

Second, Storm called for the government to annually increase its subsidies for statutory health insurance companies, and third proposed linking statutory health insurance fund expenditure to the development of incomes.

Thumb image credit: Younes Stiller Kraske /

Olivia Logan


Olivia Logan

Editor for Germany at IamExpat Media. Olivia first came to Germany in 2013 to work as an Au Pair. Since studying English Literature and German in Scotland, Freiburg and Berlin...

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