Higher Social Contributions for High-earning Individuals Set to Take Effect in 2026
German Health Insurance Contributions and Limits to Increase in 2026
In a series of announcements, the German government has revealed plans to increase contribution limits for various insurance schemes, including health insurance, pension insurance, and unemployment insurance, starting from January 1st, 2026.
The contribution to health insurance will continue to be shared equally between employees and employers at a rate of 14.6% of gross salary. However, the contribution assessment limit for statutory health insurance will see an increase from the current 5,512.50 euros per month to 5,812.50 euros per month. The insurance obligation limit will also rise from the current 6,150 euros of gross monthly income to 6,450 euros.
The expenditure of the approximately 90 health insurance funds increased by 7.95% to 166.1 billion euros in the first half of the year. This growth has led to the proposed increases in contribution limits and assessments.
Christos Pantazis, SPD health expert, has suggested that high earners should pay more into the statutory health insurance, specifically calling for an increase in the contribution assessment limit by around 2,500 euros. Janosch Dahmen, health policy spokesman of the Greens, has also voiced support for an increase but did not specify a specific amount.
Reiner Holznagel, president of the Federal Association of Taxpayers, has suggested savings in social benefits instead of just increasing limits. Dennis Radtke (CDU), chairman of the German Christian Democratic Workers' Association, shares similar concerns, stating that the federal government has little room to maneuver regarding wage development. He adds that an increase in additional contributions in statutory health insurance (SHI) is looming alongside the increase in the assessment limit, potentially causing employees to be hit twice.
Each autumn, a working group determines an orientation value for the average additional contribution in the following year, and each health insurance fund sets the specific additional contribution based on its financial situation. At the beginning of this year, the average additional contributions for statutory health insurance rose to 2.9%.
The draft regulation, which sets the limits for 2026, was previously reported by the portal "Politico". The draft regulation for the contribution limits in 2026 was sent by the Federal Ministry of Labour to other departments for consultation on Friday. The draft regulation is available to the German Press Agency.
Many employees are reportedly fed up because they hardly see progress despite hard work, according to a Member of the European Parliament. The proposed increases in contribution limits and assessments may add to their frustration, especially if they fall into the higher-income bracket.
It is important to note that income above the contribution assessment limit is not taken into account for the calculation of pension insurance contributions. The contribution assessment limit in pension insurance is the maximum amount of gross income up to which contributions to the statutory system of old-age provision are levied.
As the situation develops, it will be interesting to see how these proposed changes are received and implemented. The German government will need to balance the need for increased contributions with the concerns of its citizens and the overall economic health of the country.
