Which insurance does the employer pay? A comprehensive guide for employees
17.05.25
9
Minutes
Katrin Straub
Managing Director at nextsure
Did you know that your employer covers a significant portion of your social security contributions and may also offer additional insurance cover? Many employees are not aware of the full range of insurance benefits they are entitled to or are offered. This article looks at which insurance policies are paid for by the employer and how you can benefit from them.
The topic in brief and concise terms
Employers pay significant contributions in addition to salary to the statutory social insurance schemes (health, long-term care, pension and unemployment insurance), usually half of the total contribution.
Contributions to statutory accident insurance are borne in full by the employer and protect employees in the event of accidents at work and commuting accidents, as well as occupational diseases.
Many employers offer voluntary additional benefits such as occupational pension schemes (often with employer contributions) and corporate health insurance, which can significantly improve employees’ protection.
Mandatory insurance: The foundation of your employer-backed cover
Employers in Germany are legally obliged to pay contributions to social insurance schemes for their employees. These contributions are generally split equally between employer and employee. Social insurance contributions make up the largest share of non-wage labour costs. For 2025, the average total social security contribution is around 41.9 per cent of gross salary.
Statutory health insurance (GKV)
Health insurance is mandatory for everyone in Germany and ensures access to medical care in the event of illness. The standard contribution rate for statutory health insurance is 14.6 per cent, of which employers and employees each pay 7.3 per cent. In addition, there is a fund-specific supplementary contribution, which has also been split equally since 2019; for 2025, an average supplementary contribution of 2.5 per cent is expected.
Statutory long-term care insurance
Long-term care insurance applies in the event of a need for care and is also mandatory. The contribution rate for long-term care insurance will be 3.6 per cent from 2025 (exception: Saxony), shared by employers and employees (1.8 per cent each). Childless persons aged 23 and over pay an additional 0.6 per cent, which they bear alone.
Statutory pension insurance
Pension insurance secures financial support in old age and in the event of reduced earning capacity. The contribution rate for statutory pension insurance remains steady at 18.6 per cent, with employers and employees each paying 9.3 per cent. These contributions secure valuable pension entitlements.
Statutory unemployment insurance
Unemployment insurance provides financial support in the event of unemployment. The contribution rate for this is 2.6 per cent, also shared equally by employers and employees (1.3 per cent each). This protection is an important building block of your social security.
Accident insurance: cover for workplace and commuting accidents fully borne by the employer
A key component of statutory cover is statutory accident insurance. The employer bears the contributions for this entirely on their own. As an employee, you therefore pay nothing. Registration with the relevant employers’ liability insurance association is carried out by the employer.
Statutory accident insurance provides benefits in the event of accidents at work, commuting accidents (accidents on the direct journey to and from work) and occupational diseases. It covers, for example, the costs of medical treatment and rehabilitation and, where applicable, pays injury benefit or an accident pension. In 2021, more than 805,000 workplace accidents were recorded, underlining the importance of this cover. The amount of the employer’s contribution depends on the company’s risk class and the wage bill of the insured persons. It is important to know that accidents in leisure time are not covered by statutory accident insurance. A private accident insurance policy may be useful here.
Voluntary additional benefits: How employers can score beyond the mandatory programme
In addition to statutory compulsory insurance, many employers offer voluntary supplementary benefits to strengthen employee loyalty and become more attractive as an employer. These benefits are not required by law, but they represent significant added value. The most common voluntary insurance benefits include company pension schemes and company health insurance.
Company pension scheme (bAV): An important building block for your future
The company pension scheme (bAV) is a popular additional benefit. Since 2002, employees have had a legal entitlement to salary conversion, whereby parts of gross salary are paid into a bAV with tax and social security advantages. Since 2019, employers have had to pay a 15 per cent contribution for new contracts if they save on social security contributions through salary conversion. For 2025, contributions of up to 644 euros per month can be paid into certain bAV implementation routes tax-free and up to 322 euros per month free of social security contributions. There are various implementation routes such as direct insurance, pension funds or pension plans. A well-designed bAV can significantly reduce your pension gap in later life.
Company health insurance (bKV): More health protection as a benefit
More and more employers are also offering company health insurance (bKV). This supplements the benefits of statutory health insurance and can, for example, cover the costs of dental prostheses, visual aids or alternative healing methods. Employees often benefit from group rates without health checks or waiting periods. Contributions to a bKV can be tax and social security free as a non-cash benefit up to an allowance of 50 euros per month. According to a survey, more than 63 per cent of employees would welcome a bKV offer.
Contribution assessment ceilings and reference values 2025: What you need to know
Social insurance contributions are not levied on total gross income, but only up to certain upper limits, the so-called contribution assessment ceilings (BBG). Parts of income above these limits are exempt from contributions. These ceilings are adjusted annually. For 2025, the following key values apply:
BBG health and long-term care insurance (uniform nationwide): 5,512.50 euros per month or 66,150 euros per year.
Health insurance obligation threshold for statutory health insurance (annual earnings threshold, uniform nationwide): 6,150 euros per month or 73,800 euros per year. Anyone earning more can take out private health insurance.
BBG pension and unemployment insurance (uniform nationwide): 8,050 euros per month or 96,600 euros per year.
Our expert tip: Check your payslip regularly to ensure that social insurance contributions are being deducted correctly and that the contribution assessment ceilings are being observed. If you have any questions, your HR department or an insurance expert can help. Understanding these ceilings is important for correctly assessing your net income and retirement planning. For example, the BBG for pension insurance also affects the maximum subsidised contributions to occupational pension schemes.
Practical example: This is how employer contributions have an impact
To illustrate the significance of employer benefits, let us consider an example: an employee with a gross monthly salary of 4,000 euros (below all 2025 contribution assessment ceilings, childless, over 23 years old, covered by statutory health insurance with an average additional contribution of 2.5 per cent). The approximate monthly employer contributions (AG) and employee contributions (AN) for 2025 would be as follows:
Health insurance (14.6% + 2.5% = 17.1%): Total EUR 684 (AG: EUR 342, AN: EUR 342).
Long-term care insurance (3.6% + 0.6% for childless people = 4.2% for AN, AG share 1.8%): AG: EUR 72, AN: EUR 96 (1.8% + 0.6% surcharge).
Pension insurance (18.6%): Total EUR 744 (AG: EUR 372, AN: EUR 372).
Unemployment insurance (2.6%): Total EUR 104 (AG: EUR 52, AN: EUR 52).
In this example, the employer pays around EUR 838 per month just for social security contributions. This is in addition to the full cost of statutory accident insurance and, where applicable, contributions for levies (e.g. U1, U2, U3), which are not taken into account here but further increase the employer's total costs (levy U3, for example, 0.06 per cent). These figures make clear that the employer makes a significant contribution to your social security, one that goes far beyond your gross salary alone. It is worth understanding the tax aspects of retirement provision expenses.
Expert knowledge: levies and other costs for the employer
Besides direct social security contributions and accident insurance, employers bear additional costs that indirectly serve to protect employees. These include various levy schemes. The U1 levy secures continued pay in the event of sickness for businesses with up to 30 employees, with health insurers able to reimburse between 40 and 80 per cent of gross wages. The U2 levy finances continued pay during maternity protection and is mandatory for all employers. The U3 levy (insolvency money levy) secures employees' wages for up to three months in the event of the employer's insolvency; this amounts, for example, to 0.06 per cent.
Our expert tip: Even though these levies primarily represent costs for the employer, they offer you important safeguards as an employee. Understanding these mechanisms helps you understand the overall system of employer-provided benefits. Find out about the possibilities of group insurance that your employer may offer in order to benefit from more favourable conditions. These additional costs for the employer often amount to a further one to two per cent of gross wages.
To get the most out of the insurance paid for by your employer and the additional benefits on offer, you should take action. Use the information provided by your employer, for example via the intranet or through HR. Ask specifically about options for occupational pension provision and check whether an employer-funded occupational pension scheme or a contribution towards salary sacrifice is offered. Even small monthly contributions can build up a substantial additional pension over many years.
If your employer offers company health insurance, find out exactly what benefits are included and whether they suit your needs. The terms are often significantly better through group policies than with supplementary insurance taken out individually. Also remember to make the best possible use of capital-forming benefits, if offered, perhaps also for your retirement provision. Taking a proactive approach to these topics can significantly improve your financial and health protection.
Request your individual risk analysis now: Have your insurance situation checked free of charge and receive specific suggestions for improvement.
More useful links
The Federal Ministry of Labour and Social Affairs (BMAS) offers comprehensive information on occupational pension provision and the legal framework.
The German Pension Insurance provides important information and services specifically for employers and tax advisers relating to pension insurance.
The German Social Accident Insurance (DGUV) provides detailed information on statutory accident insurance, its tasks and benefits.
The Munich Chamber of Industry and Commerce offers an overview of the key employer obligations under labour law.
The Federal Ministry of Finance (BMF) explains the tax aspects of occupational pension provision in the context of wage tax.
FAQ
Which insurances does my employer pay in full?
Your employer pays the contributions to statutory accident insurance in full. As a rule, the U2 levy (maternity protection) and U3 levy (insolvency benefits) are also borne solely by the employer.
How can I find out which voluntary insurance policies my employer offers?
Ask your HR department or check your company’s information materials (e.g. intranet, employee handbook). Such additional benefits are often actively communicated.
Is a company pension scheme always worth it?
A company pension scheme is often very advantageous, especially when the employer contributes a supplement. Through savings on tax and social security contributions via salary conversion, an attractive additional pension can be built up. However, an individual review is worthwhile.
What happens to my occupational pension when I change jobs?
Depending on the implementation route and with the new employer’s consent, the balance or the contract can be transferred. Alternatively, the balance can remain with the former employer and be accessed when retirement begins. Salary conversion contributions are immediately vested.
Can I choose my provider for statutory health insurance myself?
Yes, as a person with statutory insurance, you can generally choose your health insurance fund freely. The employer then pays the contributions to the fund you have chosen.
Are contributions to company health insurance tax-free?
Contributions to company health insurance may be exempt from tax and social security contributions as a benefit in kind up to a monthly tax-free allowance of 50 euros. If the value of the benefits in kind exceeds this limit, the entire amount must be taxed.
