From January 2026, millions of employees in Germany will face higher social security contributions, as the federal government adjusts the income thresholds for both health and pension insurance.
The changes, confirmed ahead of Wednesday’s cabinet meeting in Berlin, are part of a regulation proposed by Labour Minister Bärbel Bas (SPD) — and they will significantly impact higher earners and skilled workers alike.
New contribution limits for pension and health insurance
According to the regulation, pension insurance contributions will now apply to monthly earnings up to €8,450, compared to the previous €8,050.
This adjustment primarily affects about 2.1 million full-time employees with top salaries — roughly 9.6 percent of the German workforce.
In the statutory health and nursing insurance system, the income threshold will rise from €5,512.50 to €5,812.50. This means that more employees will now reach the upper limit and have to pay higher contributions.
At the same time, the income threshold for switching to private health insurance increases to €6,450 (previously €6,150).
In total, an estimated 5.5 million employees will pay more starting next year.
What the increase means in real terms
For a single employee earning between €6,000 and €8,000 per month, the new rates translate to roughly €33 more in monthly contributions.
Those with an income of €8,500 or more will pay about €75 extra each month.
The contribution limits are reviewed annually and adjusted in line with general wage developments. However, this year’s increase is notably steep and comes at a time of widespread economic uncertainty.
CDU voices criticism – “fatal for competitiveness”
Despite internal agreement within the government, the measure has sparked criticism.
Gitta Connemann (CDU), State Secretary in the Ministry of Economic Affairs, described the reform as “fatal for Germany’s competitiveness,” warning that it would hit small and medium-sized enterprises hardest due to rising labor-related costs.
However, her superior, Economics Minister Katherina Reiche (CDU), approved the measure during inter-ministerial consultations.
The final decision will be formally confirmed at Wednesday’s cabinet meeting chaired by Chancellor Friedrich Merz (CDU).
The regulation does not require Bundestag approval and will therefore come into force automatically on January 1, 2026.
