Sick Pay and Daily Sickness Benefit: Optimising Financial Security during Incapacity for Work
5 May 2025
10
Minutes
Katrin Straub
CEO at nextsure
A prolonged illness can quickly lead to financial difficulties. Many people are not exactly sure about the difference between sick pay and daily sickness allowance. This article explains the details and shows you how to optimise your coverage.
The topic in brief and concise terms
Sick pay is a benefit provided by statutory health insurance, whereas daily sickness allowance is a private supplementary benefit to cover income gaps.
Statutory sick pay amounts to around 70% of gross income, a maximum of 90% of net income, and is limited to 78 weeks.
Private sickness benefit is especially important for high earners and self-employed individuals to maintain their standard of living.
Sick Pay and Sickness Benefit: The Key Differences at a Glance
The fundamental difference between statutory sick pay and sickness benefit lies in the provider and the type of coverage. Statutory sick pay is a benefit provided by the statutory health insurance (GKV) for its members. It is usually paid after the six-week salary continuation period by the employer. In contrast, sickness benefit is a provision from private supplementary insurance. Both statutory and private insured individuals can take out this insurance to cover the difference to their net income. Private coverage often offers more flexible options. Understanding this basic information is the first step towards optimal provision.
Statutory Sick Pay: Understanding Eligibility, Amount, and Duration
Statutory employees are entitled to sick pay after six weeks of continued salary payments. Self-employed individuals in the GKV may also receive sickness benefits under certain conditions, often by choosing an appropriate tariff. The amount of sick pay is seventy percent of the gross income, but not more than ninety percent of the net income. There is a contribution assessment ceiling that caps the maximum sick pay; in 2025, the maximum sick pay will be 128.63 Euro per day. Sick pay is provided for the same illness for a maximum of 78 weeks within three years, taking into account continued salary payments. Note the exact calculation basis to avoid any surprises. A sensible daily sickness allowance insurance can address this. The specific regulations can be found in the Fifth Book of the Social Code (SGB V). These statutory conditions form the basis of your coverage.
Private sick pay: Closing individual coverage gaps
Private daily sickness benefit insurance is designed to bridge the financial gap between statutory sickness benefit and your actual net income. This protection is particularly relevant for higher earners whose income exceeds the contribution assessment ceiling, as statutory sick pay is often insufficient in these cases. It is also essential for the self-employed and freelancers who have little or no entitlement to statutory sick pay. The amount of the insured daily allowance and the timing of the payout (e.g. from the 43rd day of illness) can be individually agreed. It's important that the daily sickness benefit, together with the statutory sick pay, does not exceed the previous net income (prohibition of enrichment). Protection for the self-employed requires special attention. Consider the following points when choosing the daily sickness benefit:
Amount of the daily rate: Based on net income.
Start of benefits: Usually after the end of wage continuation.
Waiting periods: Some policies have initial waiting periods.
Coverage area: Check insurance coverage abroad.
Flexibility: Option to adjust with salary increases.
Health check: Honest information is crucial.
Careful selection of the tariff is crucial for optimal protection.
Calculation examples: This is how the difference affects finances
An employee with a monthly gross salary of 4,000 euros and a net salary of 2,500 euros receives statutory sick pay after six weeks of illness. This amounts to seventy percent of 4,000 euros, which is 2,800 euros gross, but a maximum of ninety percent of 2,500 euros, which is 2,250 euros net. Social security contributions are deducted from this, so the actual payout is lower, for example, around 1,950 euros. This results in a monthly gap of about 550 euros. A self-employed person without entitlement to statutory sick pay would have no income at all from the seventh week onwards without private insurance. These examples highlight the need for additional insurance. The adjustment of daily sickness benefits in the event of income changes is an important aspect. The specific calculation can be complex, so a thorough examination is worthwhile. These figures show how important individual planning is.
Expert Tips: What to Consider When Choosing Your Insurance
When deciding for or against private daily sickness benefit insurance, you should carefully analyse your individual situation. Consider your monthly fixed costs and income. Our expert tip: Examine the conditions of your daily sickness benefit tariff closely, particularly regarding health questions and possible exclusions. Ensure that the level of daily benefit is sufficient to maintain your standard of living. For those with statutory insurance, it is important to know how long daily sickness benefits will be paid. The following aspects are particularly relevant:
Net income protection: The daily sickness benefit should bridge the gap to your net income.
Waiting period: Choose the start of benefits in line with the duration of your continued salary payment.
Contribution stability: Get informed about the development of contributions as you age.
Waiver of ordinary right of termination: The insurer should not be able to terminate the contract without reason.
Guaranteed insurability: Possibility to increase without renewed health examination during certain events.
Thorough advice can help avoid pitfalls and find optimal protection, ensuring your long-term financial security.
Keep an eye on the legal fundamentals and current developments
The legal regulations concerning sick pay are primarily found in the Fifth Book of the Social Code (SGB V), specifically paragraphs 44 to 51. These specify the requirements, amount, duration, and calculation of sick pay. For private daily sickness allowance, the respective contractual conditions of the insurer and the Insurance Contract Act (VVG) apply. Our expert tip: Stay informed about current court rulings, for example, regarding the question of when an occupational disability exists and payment of the daily sickness allowance may be ceased. Sometimes there are situations where the private health insurance does not pay the daily sickness allowance. It is important to understand the differences between daily sickness allowance and occupational disability. Legal circumstances can change, so it is advisable to stay informed. This ensures that your insurance coverage is always up to date.
Conclusion: Utilize the difference between sickness benefit and daily sickness allowance for your own protection
The difference between statutory sick pay and private daily sickness allowance is significant and has a direct impact on your financial security in case of illness. While statutory sick pay provides basic coverage for those insured under statutory health insurance, often covering around seventy percent of the gross salary, the private daily sickness allowance fills the remaining income gap. A careful analysis of your personal situation and a tailored protection plan are essential. Take advantage of the opportunity to proactively shape your financial future. With the right knowledge, you can make informed decisions. Request your individual risk analysis now: Have your insurance situation checked free of charge and receive concrete suggestions for optimisation.
More useful links
The Federal Ministry of Health offers comprehensive information on sick pay.
The EU Equal Treatment Body explains sick pay in relation to working conditions in Germany.
The Health Knowledge Foundation provides information on how to apply for sick pay.
The VdK compiles the most important rules on sick pay.
The Federal Administration offers information on services related to sick pay.
The AOK informs about benefits in case of incapacity to work and sick pay.
FAQ
Who pays sick pay and who pays daily sickness allowance?
Sick pay is paid by the statutory health insurance (GKV). The daily sickness allowance is a benefit provided by private health insurance or a private supplementary insurance.
What is the sickness benefit rate?
Sick pay amounts to 70 percent of the regular gross salary, but no more than 90 percent of the net salary. There is a legal maximum limit.
Is sickness allowance important for self-employed individuals?
Yes, for self-employed individuals, daily sickness allowance insurance is often essential because they typically do not have entitlement to continued payment of wages or statutory sick pay, or this is insufficient.
Can I receive both sick pay and daily sickness allowance at the same time?
Yes, the daily sickness benefit is intended to fill the gap between statutory sick pay and your net income. However, both benefits together must not exceed your previous net income.
When is sickness benefit paid?
The commencement of sickness benefit can be individually agreed upon, usually after the statutory continuation of pay for six weeks, i.e., from the 43rd day of incapacity for work.
Is sick pay taxable?
Sick pay is tax-free but subject to the progression proviso. This means it is used to determine your tax rate and can increase it.
