Planned increase in social contributions for highly-compensated employees commencement in 2026

In a move that could affect high-income earners in Germany, the government has proposed changes to the contribution assessment ceilings for social security funds. The draft regulation for these changes, initially reported by the portal "Politico", has been sent by the Federal Ministry of Labour for consultation to other departments.

Starting next year, the contribution assessment ceiling for social security funds will increase. For statutory health insurance, the ceiling will rise from 5,512.50 euros per month to 5,812.50 euros. Similarly, for statutory pension insurance, the ceiling will increase from 8,050 euros per month to 8,450 euros.

These increases are part of a larger plan, as from 2023, the contribution assessment ceilings for both statutory health and pension insurance are set to rise further. The pension insurance ceiling will increase from €8,050 to €8,450 monthly, and the health and nursing care insurance ceiling will increase by €300 to €5,812.50 monthly.

The general statutory health insurance contribution will remain at 14.6% of gross income, but the average additional contribution rate is expected to increase, such as to 2.5% in 2025. This means higher contributions for higher earners starting in 2023.

Advocates for these changes include Janosch Dahmen, the health policy spokesman of the Greens, who has called for a gradual increase in the contribution assessment ceiling, aligning it with the level of statutory pension insurance. Christos Pantazis, the SPD's health expert, has also proposed that high earners should pay more into the statutory health insurance, specifically advocating an increase in the contribution assessment ceiling by around 2,500 euros to stabilize the strained financial situation of the insurers.

It's worth noting that income above the contribution assessment ceiling in the pension insurance is not taken into account for the calculation of pension insurance contributions. The development of wages and salaries is considered to determine the relevant values of the calculation variables of social security.

The compulsory insurance threshold for statutory health insurance will be raised from 6,150 euros gross monthly income to 6,450 euros per month in 2026. The exact date for the adjustment in 2026 is not specified in the given paragraph.

These changes, if implemented, will likely result in high-income individuals paying more into their social security funds next year. The draft regulation for these changes is available to the German Press Agency.