The German Sozialversicherung (social insurance system) comprises five statutory branches funded through payroll contributions split between employers and employees. The five pillars are: Krankenversicherung (statutory health insurance), Pflegeversicherung (long-term care insurance), Rentenversicherung (pension insurance), Arbeitslosenversicherung (unemployment insurance), and Unfallversicherung (statutory accident insurance). With the exception of accident insurance, which is funded entirely by employers, contributions are shared roughly equally between the employer and the employee.
Contribution rates are set annually by federal regulation and adjusted to the Beitragsbemessungsgrenze (contribution assessment ceiling), above which earnings are not subject to further contributions. For 2025, the combined employer-employee rate across health, long-term care, pension, and unemployment insurance amounts to approximately 40 per cent of gross wages below the ceiling. Employees with earnings above the Versicherungspflichtgrenze (compulsory insurance threshold) may opt out of statutory health insurance in favour of a private scheme, though they remain compulsorily insured for the other four branches.
All employees and their employers are registered with the relevant social insurance carriers via the Einzugsstelle (collecting agency), typically the employee's health insurer. Monthly declarations and contributions are remitted through payroll, with employers responsible for accuracy and timeliness. Foreign employers seconding staff to Germany under an EU or bilateral social security agreement may hold a Certificate of Coverage (A1 form) exempting the employee from German social insurance for the duration of the assignment.