Company pension: what the health fund deducts
From a €450 company pension about €60 a month goes to health and care insurance in 2026, because the allowance only helps with health insurance.
Checked by Radif Partners · Editorial policy · How we calculate
How much of your company pension goes to the fund
Deduction a month
€60
| Health insurance | €44 |
| contributory part | €252 |
| Care insurance | €16 |
| Company pension before tax | €390 |
2026, average additional rate, one child, no other occupational income. Allowance €197.75.
Company pensions (Betriebsrenten) are subject to contributions for compulsorily insured pensioners, as occupational income (Versorgungsbezüge, section 229 of Book V of the Social Code, SGB V). Unlike the state pension, nobody pays half: you pay the general rate of 14.6 % and your fund’s full additional rate alone (section 248), plus care insurance of 3.6 %, or 4.2 % if childless. Relief comes in two stages. If all occupational income together is no more than €197.75 a month, the company pension is completely exempt. If it is above that, health insurance deducts an allowance of the same size from company pensions, but care insurance does not: there the whole amount counts (section 226(2) SGB V). On a €450 company pension and the average additional rate of 2.9 %, that is €44 health and €16 care insurance a month. In 2027 the threshold rises provisionally to €206.50.
Two limits of the same size that work differently
The law uses one amount twice for company pensions: one twentieth of the monthly reference value, €197.75 in 2026. As a threshold it applies to health and care insurance: if all your occupational income, plus any earnings alongside the pension, stays below it, you pay nothing on the company pension. As an allowance, since 2020, it applies only to health insurance and only to company pensions proper: it is deducted from every company pension, however large. Care insurance has no such allowance. Go one euro over the threshold and care insurance suddenly charges on the whole amount.
| Company pension a month | Health insurance | Care insurance | Deduction total | left before tax |
|---|---|---|---|---|
| €150 | €0 | €0 | €0 | €150 |
| €300 | €18 | €11 | €29 | €271 |
| €450 | €44 | €16 | €60 | €390 |
| €800 | €105 | €29 | €134 | €666 |
| €1,500 | €228 | €54 | €282 | €1,218 |
At €150 nothing is due, from €300 the health allowance makes a clear difference, and on large company pensions it hardly matters. These limits do not apply to the state pension; there you pay half the rate and half the additional rate from the first euro, €198 a month on a €1,600 pension. The pensioners’ calculator works out state and company pension together.
What counts as a company pension
Contributions are due on occupational pensions from all five routes German employers use: direct pension promise, support fund, direct insurance, pension fund (Pensionskasse) and Pensionsfonds. Occupational pensions from the public sector, such as the VBL supplementary scheme, and pensions from professional schemes count too. Benefits from retirement savings under section 92 of the Income Tax Act, that is company schemes subsidised with Riester grants, are exempt (section 229(1), sentence 1, no. 5 SGB V). Private pensions you took out without an employer are not occupational income for compulsorily insured pensioners and stay contribution-free; for voluntary members they do count. If in doubt, the letter from the paying body that reports the pension to your fund shows how it is classed.
Why company pensioners pay the full rate
For the state pension, the pension insurance pays half the contribution. For company pensions nobody plays that role: the former employer is no longer involved, and pension funds or direct insurance policies pay no subsidy. Section 248, sentence 1 SGB V therefore sets the full general rate, and under section 242(1) SGB V the fund’s full additional rate is added. That makes the choice of fund more important for company pensioners than for other pensioners: every point of additional rate weighs twice as much on the company pension as on the state pension.
The contribution is usually deducted at source: the body paying the company pension keeps it back and pays it to the fund (section 256(1) SGB V). When the fund changes its additional rate, the change therefore arrives with a delay, from the first day of the second month after it (section 248, sentence 3 SGB V). If you receive several occupational pensions, say a direct insurance policy and a pension fund payment, they are added together for the threshold; the allowance is granted only once in total.
A lump sum instead of a pension
If the company pension is paid out as a lump sum, it is not contribution-free. The fund spreads the capital over ten years: one hundred-and-twentieth counts as monthly occupational income. €36,000 becomes €300 a month; at the average rate you pay €18 health and €11 care contribution on it, €3,443 over ten years. The only exception is what you acquired after the employment ended as the sole policyholder from contributions not financed by the employer (section 229(1), sentence 1, no. 5 SGB V).
2027 and the choice of fund
Under the cabinet decision the reference value rises to €4,130 in 2027, taking the threshold and allowance provisionally to €206.50. On a €450 company pension the deduction then falls to €59, if the additional rate stays the same. Whether it does is decided by your fund in December. For comparison: at Techniker Krankenkasse (TK), charging 2.69 %, a €450 company pension costs €44 in health insurance; at BKK24, charging 4.39 %, €48. Every fund’s rate is in the list of additional rates, and the switching deadlines under switching your fund.