Increase of Social Security Contribution and Compulsory Insurance Ceilings Effective January 1, 2025

Quick Hits

1. Compulsory Insurance Limit in Statutory Health Insurance

The annual income ceiling for statutory health insurance, also known as the compulsory insurance limit, will rise to EUR 73,800 (2024: EUR 69,300) per year or EUR 6,150 (2024: EUR 5,775) per month. The compulsory insurance limit is decisive for whether employees can opt for private health insurance.

2. Contribution Assessment Ceiling in Pension Insurance
For the first time, the contribution assessment ceiling for the general statutory pension insurance will uniformly be raised   to EUR 96,600 per year or EUR 8,050 per month for. This adjustment eliminates the previous distinction between the old and new federal states. Previously, the ceiling was EUR 7,550 (old federal states) or EUR 7,450 (new federal states) per month. This ceiling determines the maximum income considered for calculating pension insurance contributions. Income above this limit is also exempt from contributions.

3. Contribution Assessment Ceiling in Statutory Health and Long-Term Care Insurance
The contribution assessment ceiling for statutory health and long-term care insurance will rise to EUR 66,150 (2024: EUR 62,100) per year or EUR 5,512.50 (2024: EUR 5,175) per month. This ceiling sets the maximum income level that is subject to insurance contributions. Income exceeding this limit is not subject to contributions.

Key Takeaways

The annual adjustment of social insurance calculation parameters in line with income trends is essential for the financing of social security systems. However, the increase in the contribution assessment ceilings will result in a greater financial burden for both employers and high-earning employees.

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