Employer costs in Germany

What does an employer actually pay on top of salary?

The headline German employer rate is built from five statutory contributions, four of them shared with the employee and one of them the employer's alone. On pay up to EUR 5,812.50 a month they come to about 21.30% of gross. Three further employer-only items sit outside that figure and are covered below.

Only 19.85 points of that 21.30% are fixed by law. The remaining 1.45 is half of the supplementary health rate and that rate is set by each health fund rather than nationally. The 2.9% used here is the statutory average for 2026. Individual funds sit meaningfully above and below it, so the employer's true total varies with the fund the employee chooses, which is the employee's decision and not the employer's.

One regional variation matters. In Saxony the employee bears half a percentage point more of care insurance and the employer half a point less, so the employer's care share is 1.30% rather than 1.80%. That is because Saxony was the only federal state that did not give up a public holiday when the care scheme came in. A Saxon employer's total is 20.80% rather than 21.30%.

Why does the loading fall as salary rises?

Because German contributions are capped and the two caps sit at different levels. Health and care stop at EUR 5,812.50 a month. Pension, unemployment and the insolvency levy run to EUR 8,450. The employer's marginal rate therefore steps down twice rather than tapering.

The practical effect is that the headline percentage overstates the statutory stack on a senior hire, though it can understate the total in the other direction where the employee's health fund charges above the average supplementary rate and before the three further employer-only items below are added. A company modelling a German team on a single blended loading will over-provision at the top of the salary range, sometimes by a wide margin, which is a budgeting problem rather than a compliance one but is worth knowing before a business case is signed.

What does the arithmetic look like on a real salary?

The example below is stated on annual contractual gross salary, with contributions computed month by month against the 2026 ceilings, because the ceilings are monthly figures and an annual average would smooth away the step.

What sits outside the headline rate?

Three employer-only items, none of which can be quoted from a national table and one of which behaves differently from everything above.

Accident insurance is compulsory, employer-funded and administered by the sector Berufsgenossenschaft, which sets its own risk tariff. It is assessed on that body's own maximum annual earnings figure rather than on either social-insurance ceiling. That maximum starts at EUR 94,920 a year, which is EUR 7,910 a month, so for an employer whose sector body sits at the statutory minimum, accident insurance actually stops before the pension ceiling. Some sector bodies set it high enough to run past both. Which applies depends on the employer's sector, not on the salary.

The maternity levy is payable by employers generally, with no size threshold and is set by the employee's health fund. The sick-pay levy is payable only by employers with no more than 30 staff and is likewise set by the fund. Both are real cost and neither has a published national figure.

What floors the pay of a supplied worker?

Where the arrangement is employee leasing under the Arbeitnehmerüberlassungsgesetz, pay is not simply a negotiation. Two instruments apply in order.

A regulation made under section 3a sets a minimum hourly rate for supplied workers that is separate from, and higher than, the general statutory minimum wage. Under the Seventh Wage Floor Regulation that rate is EUR 14.96 an hour, rising to EUR 15.33 on 1 September 2026 and EUR 15.87 on 1 April 2027. The general minimum wage over the same period is EUR 13.90, rising to EUR 14.60 in January 2027. A cost model built on the general minimum wage therefore understates the floor for a supplied worker by between roughly EUR 0.73 and EUR 1.43 an hour, depending on the date, because the two figures step on different calendars.

Above that floor, section 8(1) makes the pay of a comparable employee in the hirer's own establishment the default. A collective agreement for the temporary-work sector can derogate on pay for the first nine months of an assignment and for longer where it steps the worker up to a rate the agreement defines as equivalent to the user sector's collective rate by month fifteen. An employer that has not signed such an agreement can adopt it by reference. The derogation can also run beyond month fifteen, provided the agreement steps the worker up to a rate it defines as equivalent to the user sector's collective rate, beginning after an induction period of no more than six weeks and reaching it by month fifteen at the latest. So the question is never simply when equal treatment starts: it is which agreement applies and what that agreement pays. That is a question about the applicable collective agreement rather than about the provider's price list and it is answered before a placement rather than during one. The mechanism is set out on the AÜG licence page.

What should a German budget carry that a rate card does not?

Four things, none of which can be quoted from a national table. The supplementary health rate the employee's fund actually charges, rather than the national average. The sector accident-insurance tariff, which no provider can quote without knowing the sector body. The maternity levy and the sick-pay levy, where the employer is small enough to owe the second. Finally, where the arrangement is employee leasing, which collective agreement governs pay plus what it actually pays, since that is set by the agreement rather than by the contract with the provider.