Self-employed sick pay: Optimize financial security during illness
21 Jun 2025
5
Minutes
Katrin Straub
CEO at nextsure
An extended absence due to illness can quickly become existentially threatening for the self-employed. Without an employer to continue paying wages, an immediate income gap can appear. Find out how to prepare with the right daily sickness allowance.
The topic in brief and concise terms
Self-employed individuals require specific protection against loss of earnings due to illness, as there is no automatic continuation of wage payments; daily sickness allowance fills this gap.
The amount of sickness allowance should be carefully calculated to cover ongoing private and business expenses; statutory sick pay alone is often not enough.
Private daily sickness benefit insurance offers flexible design options regarding the level of benefits and waiting periods, is tax-free upon payout, but contributions are only tax-deductible to a limited extent.
Quick Facts: The Essentials on Sick Pay for the Self-Employed
Self-employed individuals do not have an automatic entitlement to continued salary payment in the event of illness. A private daily sickness benefit insurance or a chosen tariff in the statutory health insurance (GKV) is therefore often essential. The daily sickness benefit secures your income if you are unable to work for more than six weeks. The amount of statutory sickness benefit is generally seventy percent of the gross income, but a maximum of 128.63 euros per day (as of 2025). Private insurance can close this gap and is customizable. Pay attention to the waiting periods, which can vary between three and eight months depending on the tariff.
Practical Part: Understanding and Effectively Using Sick Pay for the Self-Employed
Coverage through an independent daily sickness benefit is essential for entrepreneurs. Imagine your monthly net income is €4,000. In case of illness without coverage, this income is lost from the first day. With a statutory sickness benefit option, you receive seventy percent of your chargeable income from the 43rd day. For income at the contribution assessment ceiling, this would be a maximum of €128.63 per day. A private daily sickness benefit insurance can bridge this gap earlier and more comprehensively. You could, for example, arrange a daily benefit of €133 to cover your monthly €4,000. The costs vary; a 35-year-old self-employed person could obtain a tariff for around €30 per month if payment starts from the seventh week. More information on the difference between statutory sickness benefit and daily sickness benefit can be found on our blog. This flexibility is a major advantage of private insurance.
Calculation of the optimal daily sickness allowance: An example calculation
The correct calculation of your self-employed sickness daily allowance is crucial. Suppose your average monthly net income over the past twelve months is 3,500 euros. Your monthly fixed costs (rent, insurance, private expenses) amount to 2,500 euros. To cover these costs, you need a daily sickness allowance of at least 83.33 euros per day (2,500 euros / 30 days). Statutory insured individuals with a choice tariff receive seventy percent of their income from the 43rd day, which would be 2,450 euros monthly (about 81.67 euros daily) on a gross income of 3,500 euros. This creates a gap of just under two euros daily just for the fixed costs. Many self-employed people completely underestimate the first six weeks, during which no statutory sickness benefit is paid. A private sickness allowance insurance can close this gap and may start paying out sooner. Consider whether you find sickness daily allowance insurance sensible. The choice of the right waiting period, i.e., when the daily allowance starts being paid, significantly affects the premium.
Legal principles and recent rulings on sick pay
Sickness benefits for the self-employed are regulated in the Fifth Book of the Social Code (SGB V). Those self-employed full-time can opt for a statutory entitlement to sickness benefits from the seventh week by submitting a declaration of choice to their health insurance company (§ 44 para. 2 SGB V). For this, they pay the standard contribution rate, which is 0.6 percentage points above the reduced rate. They are bound to this choice for three years. An important ruling by the Frankfurt Social Court has confirmed that the sickness benefit for voluntarily insured individuals is final and cannot be retrospectively adjusted for higher income, unlike contributions. This underscores the need to accurately calculate the amount of sickness benefit from the outset. For those privately insured, a private daily sickness allowance insurance is the only option, as they are not entitled to statutory sickness benefits. The premiums for private daily sickness allowance insurance can be claimed for tax purposes as precautionary expenses, although the maximum amount is often already exhausted by health insurance contributions. The paid out private daily sickness allowance is tax-free.
Expert tips on designing your daily sickness allowance insurance
When selecting an independent daily sickness benefit insurance, there are several aspects to consider. Our expert tip: Ensure the option for dynamisation without a new health assessment is available, so that you can adjust your daily benefit to match rising incomes. Many insurers offer such an adjustment of daily sickness benefit. Choose the waiting period carefully; a longer waiting period (e.g. from the 43rd day) significantly reduces the premium but requires higher reserves for the first six weeks. For entrepreneurs with often lower income in the initial years, a tariff with a lower starting daily benefit and the option to increase later may be advisable. Examine the conditions for claiming benefits carefully: Some tariffs, for example, do not provide benefits if your business continues to operate and generate profits despite your illness. Also, clarify the duration of daily sickness benefits; up to 78 weeks within three years for the same illness is common.
Here are some important aspects to consider:
Amount of daily benefit: It should cover ongoing costs and ideally provide a buffer.
Waiting period: When should the benefits commence? The 15th, 22nd, or 43rd day are common.
Duration of benefits: How long will payments be made in the event of a claim?
Guaranteed insurability: Can the daily benefit be increased without a new health assessment?
Scope of coverage: Does the protection also apply abroad?
Waiver of the insurer's ordinary right to terminate: Important for long-term security.
These considerations will help you design tailor-made protection.
Sickness allowances and taxes: What self-employed individuals need to know
The tax treatment of self-employed daily sickness allowance is an important aspect. Contributions to a private daily sickness allowance insurance can be claimed as other precautionary expenses in the tax return. However, there are maximum limits (1,900 euros for employees and civil servants, 2,800 euros for the self-employed who pay their health insurance in full themselves), which are often used up by contributions to health and nursing care insurance. The daily sickness allowance paid by a private insurance is completely tax-free and is not subject to the progression clause. This means it does not increase the tax rate for your other taxable income. In contrast, statutory sickness benefit is also tax-free but subject to the progression clause, which can lead to a higher tax burden on other income. For an accurate assessment of your tax situation, consulting a professional is advisable. Find out more about affordable statutory health insurance for the self-employed.
Avoiding pitfalls and common mistakes in securing
A common mistake is underinsurance with sick pay for self-employed individuals. Many only calculate the absolutely necessary private expenses and forget ongoing business overheads that continue even during illness. Another pitfall is the assumption that the business can simply be continued by employees or partners in the event of sickness without affecting the sick pay entitlement. Some insurance conditions stipulate reductions or exclusions if the insured person continues to earn income from their self-employed activity despite being unable to work or if the business continues to generate profits. The situation is particularly critical for start-up founders without significant income in the initial phase, as there is often no entitlement to statutory sick pay and the basis for calculating private daily allowances is lacking. Make sure to clarify what happens if the private health insurance does not pay the sick pay. A thorough examination of the insurance conditions before conclusion is therefore essential.
Pay attention to the following points to avoid problems:
Honest health declarations: Incorrect information can lead to the loss of insurance coverage.
Timely notification of incapacity for work: Be sure to adhere to the insurance deadlines.
Adequate level of daily allowances: Regularly review and adjust.
Understanding the triggers for payout: When does the insurance actually pay?
Clarification of the situation with ongoing operations: Does this affect the payment?
Forward planning protects against unpleasant surprises.
Combination with other insurances: A comprehensive safety net
Your next step towards optimal protection
More useful links
Wikipedia offers a comprehensive overview of the sickness benefit in Germany.
The Federal Ministry of Health provides detailed information on the sickness allowance.
The Federal Ministry of Labour and Social Affairs provides information on incapacity for work.
The Federal Ministry of Finance explains the tax treatment of sickness benefits.
FAQ
What is the difference between sick pay and sickness allowance for the self-employed?
Sick pay is a benefit from statutory health insurance that self-employed individuals can opt for by choosing a higher contribution rate (usually paid from the 43rd day). Daily sickness allowance is a private insurance that can be more flexible in terms of amount and start of benefits, and is also accessible for those privately insured.
How long is sickness allowance paid?
The duration of sickness benefit payments depends on the tariff. Statutory sick pay is provided for a maximum of 78 weeks for the same illness within a three-year period. Private tariffs often align with this, but they can also differ.
What happens if I am self-employed and sick for a longer period?
In the event of incapacity to work beyond the chosen waiting period, the daily sickness benefit insurance pays the agreed daily allowance. Ideally, a separate occupational disability insurance would cover in case of occupational disability.
Are the contributions towards sick pay deductible for tax purposes?
Yes, contributions to private daily sickness insurance can be claimed as other precautionary expenses for tax purposes, but the maximum amounts are often already reached through health and long-term care insurance contributions.
Do I need a daily sickness benefit insurance as a privately insured self-employed person?
Yes, absolutely. Self-employed individuals with private insurance are not entitled to statutory sick pay and therefore rely on a private daily sickness benefit insurance to safeguard against income loss during illness.
Can I adjust the amount of my daily sickness allowance later?
Many private daily sickness allowance insurance policies offer follow-up insurance guarantees. This allows you to adjust the insured daily allowance for certain events (e.g., income increase) without a new health check.
