Germany: Insurance contributions up to 50%?

2025-07-13 14:14:00, Kosova & Bota CNA

Economist and member of the German Economic Expert Council, Martin Werding, has said that employees should prepare for social security contributions amounting to up to 50 percent of their gross income. "The current development is staggering. The question is not whether contribution rates will reach 50 percent at some point, but when," Werding told the Rheinische Post.

Due to the aging population, the trend towards increasing contributions will continue unchanged in Germany unless reforms are made in the 2030s, predicts Werding. The professor of social policy and public finance at Ruhr University in Bochum expects the next increase in contributions to take place as early as 2026.

Currently, social security contributions for employees and employers together amount to about 42 percent of gross income. Werding expects them to rise to 43 percent during the year. He noted that some health insurance companies have already exceeded the 17 percent average and have already increased their additional contributions again this year. "Currently, the average is likely to be 17.5 percent."

Another increase in long-term care insurance is expected at the turn of the year. The pension fund is expected to be affected later: in 2027 or 2028 at the latest, the contributions, which have remained constant at 18.6 percent for a long time, will increase to almost 20 percent. "This means reaching a tax burden of 45 percent soon by the end of this legislative period," said the economist, who called for far-reaching reforms.

For the expert, the measures currently being discussed, such as raising the threshold for assessing social contributions and including civil servants in social security, are not enough. "In some cases, this simply creates financial gaps elsewhere - for example, in the budgets of the states that employ the majority of civil servants," Werding emphasizes. Debates are needed about the development of social spending, their effectiveness, such as the maternity pension, which has some specificities and has caused debate in Germany. Expert Martin Werding is a member of the German Economic Expert Council, which deals with the economic development of Germany from a research perspective./ DW