Employer contribution to private health insurance: maximum amount and calculation

The employer contribution to private health insurance is governed by § 257 SGB V, and the contribution to private Pflegepflichtversicherung (i)PflegepflichtversicherungCompulsory long-term care insurance. Everyone with health insurance in Germany must have it, privately insured people through their private insurer. by § 61 SGB XI. Every employee who is exempt from compulsory insurance because their pay exceeds the Jahresarbeitsentgeltgrenze and who has substitutive private health insurance is entitled to it. The employer can neither refuse it nor make it subject to conditions.

For tax purposes, the employer contribution is free of tax and social security contributions for the employee under § 3 No. 62 EStG. It is part of the payroll, but it is not taxable income.

The basic rule: 50 percent of the actual premium, capped at half of the notional statutory maximum contribution. You can check the cap yourself. The monthly Beitragsbemessungsgrenze of €5,812.50 multiplied by half the total contribution rate of 8.75 percent (half the general contribution rate of 14.6 percent plus half the average Zusatzbeitrag (i)ZusatzbeitragThe additional contribution each statutory health insurance fund charges on top of the general rate. Its level differs from fund to fund.More about Zusatzbeitrag → of 2.9 percent) gives exactly €508.59. From 2027, according to the cabinet decision, the monthly ceiling rises to €6,375. With the same rate of 8.75 percent, this gives an expected €557.81. The value is only final once the average additional contribution rate for 2027 has been set.

Two examples show the effect of the cap:

• gross premium €1,000 per month: 50 percent is €500, which is below the cap, so the employer pays €500
• gross premium €1,100 per month: 50 percent would be €550, here the cap applies, so €508.59 is paid and the employee bears the rest alone

With the cap of €557.81 from 2027, the full €550 would be paid in the second example.

The premiums given are guide values.

If you want to calculate the employer contribution yourself, all you need is the premium certificate from your insurer. The steps:

• find the monthly gross premium for health insurance
• take half of it
• compare the result with the cap of €508.59 (2027: €557.81)
• use the lower value

Long-term care insurance is calculated separately with its own cap of €104.63 (2027: €114.75). Premiums for insured family members belong in the same calculation, as long as the total does not exceed the maximum amount. The result should match your payslip. In practice, differences usually arise after premium adjustments.

Since January 1, 2026, the employer contribution has generally been taken into account through the new ELStAM procedure. The insurer sends the data relevant for private health insurance and private long-term care insurance electronically to the employer via the Federal Central Tax Office. An informal application with a premium certificate is therefore usually no longer needed. The employer still checks whether the conditions under § 257 SGB V and § 61 SGB XI are met.

For insured people this means: after a switch to private health insurance, a premium adjustment or a plan change, check your next payslip carefully. If the employer contribution is missing or too low, inform the payroll department early. Corrections back in time are possible, but in practice they are often needlessly complicated.

With part-time work, the employer contribution at first stays the same, because the private premium does not depend on income. You need to be careful if the reduction takes you below the Jahresarbeitsentgeltgrenze (i)JAEG · JahresarbeitsentgeltgrenzeThe annual income threshold in Germany. Employees who earn more than this per year may leave statutory health insurance and switch to private health insurance.More about JAEG →. Then compulsory insurance returns and the whole arrangement has to be checked again. With several employers, the employer contribution is split in proportion to the pay from each, and in total it stays at the maximum amount.

During parental leave without pay, the employer contribution usually stops completely, but the premium continues. If you receive parental allowance, Krankentagegeld (i)KrankentagegeldPrivate sick pay: a daily allowance from private insurance while you are unable to work. It replaces lost income from an agreed day of illness.More about Krankentagegeld → or maternity pay, you get no employer contribution under § 257 SGB V for that period. If your spouse is an employee with private health insurance, the family premium may in some cases run through their employer contribution. With short-time work, the entitlement remains in principle. Civil servants are completely outside this system. They receive no employer contribution but Beihilfe from their public employer, and they only insure the remaining costs privately. Before parental leave, a sabbatical or part-time work, we recommend a liquidity check, because losing or reducing the employer contribution changes the monthly burden considerably.

In our advice work, we always answer the question of whether private health insurance pays off for employees with the same figure: the share you pay after the employer contribution, not the gross premium. A plan of €700 effectively costs an employee €350, while a self-employed person pays the full €700. The share you pay yourself remains tax-deductible as a provision expense, which improves the net calculation further.

Before employees switch to private health insurance, we recommend that they test their life planning against a realistic assumption about self-employment or a change of career. If you want to become self-employed in the medium term, you lose the employer contribution and should plan for that in your calculation.

No. The employer contribution is tax-free under § 3 No. 62 EStG and is not subject to social security contributions, as long as it does not exceed the legal maximum limits. Only a voluntary higher payment by the employer would be taxable wages.

Yes. The premiums for spouses and children who would be covered by family insurance without private insurance are included in the calculation. The maximum amount of €508.59 (2027: €557.81), however, applies to the total. Submit your family members' premium certificates to your employer yourself.

Then the exemption from compulsory insurance ends, and you generally become compulsorily insured in a statutory health insurance fund again. The employer contribution to private health insurance stops and is replaced by the normal employer contribution to statutory health insurance. If you want to stay privately insured, you need an exemption from compulsory insurance.