Employer Contribution to Private Health Insurance in Germany: How the 50% Subsidy Works (2026)
Employers pay up to half of your private health insurance premium under § 257 SGB V. 2026 maximums, who gets it and how payroll handles it.
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If you are an employee with private health insurance (PKV), your employer must pay half of your premium, up to a legal maximum. In 2026 that maximum is about €508.59 a month for health insurance plus €104.63 for care insurance (€613.22 in total). The subsidy never exceeds half of what you actually pay. It does not apply to freelancers, self-employed people or civil servants, and it is not needed if you are in public health insurance (GKV), where the employer pays its share of contributions directly.
This guide explains who qualifies, how the maximum is calculated, what payroll still needs from you and what changes next year. For the full picture of private premiums, see our private health insurance cost guide.
- Employer subsidy: half of your actual premium, capped (§ 257 Abs. 2 SGB V).
- Contribution ceiling for health and care insurance in 2026: €5,812.50 a month, €69,750 a year (DRV).
- Rates used for the maximum: 14.6% general rate and 2.9% average Zusatzbeitrag in 2026 (BMG).
- Maximum subsidy 2026: about €508.59 (health) plus €104.63 (care) equals €613.22 a month.
- Income threshold for employees to be exempt from GKV in 2026: €77,400 a year (DRV).
Who gets the employer contribution to private health insurance?
Employees who are privately insured because they earn above the income threshold (Jahresarbeitsentgeltgrenze) or are exempt from compulsory insurance get the subsidy, as long as their insurer meets the legal conditions. Self-employed people, freelancers and civil servants do not, because they have no employer paying social insurance on their behalf.
| Your status | Employer subsidy? | What applies instead |
|---|---|---|
| Employee above the income threshold, privately insured | Yes | Half of your premium, up to the cap |
| Employee exempt from compulsory insurance, privately insured | Yes | Half of your premium, up to the cap |
| Employee in public insurance (GKV) | Not applicable | Employer pays its share of contributions directly |
| Freelancer or self-employed | No | You pay the full premium |
| Civil servant (Beamter) | No | Beihilfe from the state, private policy for the rest |
| Student who opted out of student insurance | Only if you also work as a qualifying employee | You normally pay the full premium |
The legal basis is § 257 Abs. 2 SGB V. It grants the subsidy to employees who are exempt from compulsory insurance because of the income threshold or exempt on application, and who are insured with a private insurer. To check whether you can be exempt in the first place, read who qualifies for private health insurance.
How much does the employer pay in 2026?
The employer pays half of your actual premium, but never more than the share it would owe in public insurance on your pay, counted up to the contribution ceiling. At or above the ceiling, the health insurance maximum in 2026 is about €508.59 a month. If you are exempt but earn less than the ceiling, the cap is lower, because it is based on your actual pay. For care insurance it is €104.63. Whichever is lower, half your premium or the maximum, is what you receive.
The health insurance maximum comes from two halves: half of the 14.6% general rate (7.3%) plus half of the 2.9% average Zusatzbeitrag (1.45%), which is 8.75%, applied to the ceiling of €5,812.50. The statute describes the cap as half of the rate under § 241 SGB V plus the average additional contribution, limited to half of your real premium (§ 257 SGB V).
| 2026 maximum, per month | Calculation | Amount |
|---|---|---|
| Health insurance | 8.75% of €5,812.50 | about €508.59 |
| Long-term care insurance | 1.8% of €5,812.50 | about €104.63 |
| Combined maximum | Sum of both | about €613.22 |
The 2.9% is the statutory average Zusatzbeitrag set by the Ministry of Health (BMG), not what any particular public fund charges. It is the figure used for the private subsidy.
Worked examples: what will my employer actually pay?
Compare half of your premium with the maximum, separately for health and care insurance. The lower figure is what the employer adds to your salary. The two examples below use the 2026 maxima and invented premiums, for illustration only.
Health premium €600 a month, care premium €60 a month.
Health subsidy: half is €300, below €508.59, so you get €300. Care subsidy: half is €30, below €104.63, so you get €30. Total €330. You pay the other €330.
Health premium €1,300 a month, care premium €140 a month.
Health subsidy: half is €650, which exceeds the cap, so you get €508.59. Care subsidy: half is €70, below €104.63, so you get €70. Total €578.59. You pay €861.41.
The cap matters mostly for older members and people with expensive tariffs. Once your health premium passes about €1,017 a month, half of it is above the maximum and the employer no longer pays a full half. You are not penalised for choosing a comprehensive tariff, but the extra cost above the cap is yours alone.
What about the care insurance (PPV) contribution?
Private long-term care insurance (Pflegepflichtversicherung, PPV) is subsidised separately. The employer pays half of your actual PPV premium, limited to the share it would owe in public care insurance (§ 61 Abs. 2 SGB XI). In 2026 the employer rate is 1.8% of the ceiling, or €104.63 a month.
In public care insurance, employees pay their own share too, and childless members aged 23 and over pay a higher rate (TK contribution table 2026). Private care premiums are risk-based and not tied to income, so the cap rarely binds for younger members. In Saxony the split of care insurance contributions between employer and employee differs from the rest of Germany, so ask payroll how your subsidy is calculated there.
How do part-time work and family members affect the subsidy?
The subsidy is calculated on your own pay, up to the 2026 ceiling of €5,812.50, and is capped at half of what you actually pay. Lower pay therefore means a lower maximum, and adding family members does not raise the cap. Ask payroll which premiums it includes in the calculation.
Hypothetical employee, exempt on application, with €3,000 gross pay a month. Health premium €700, care premium €120 (invented figures).
Health cap: 8.75% of €3,000 is €262.50, below half the premium (€350), so you get €262.50. Care cap: 1.8% of €3,000 is €54.00, below half the premium (€60), so you get €54.00. Total €316.50, not the full-ceiling maximum of €613.22.
Hypothetical employee paid above the ceiling. Premiums that count towards the subsidy add up to €1,300 a month for health insurance, for the employee and family together (invented figure, assuming all of it counts).
Half is €650, but the 2026 health cap is €508.59, so the subsidy is €508.59. The cap does not grow with the number of insured people.
We have not verified special rules for several employers at once, so ask each payroll department how it calculates your subsidy. The calculation basis is in § 257 Abs. 2 SGB V.
How does payroll handle the employer contribution?
From 2026, German private insurers send your premium data electronically to the Federal Central Tax Office, and your employer receives it through ELStAM. For tax purposes you generally no longer hand HR a paper certificate. Your employer still checks whether you are entitled to the subsidy under § 257 SGB V and calculates its amount.
- German insurer: the data travel electronically. Insurers transmit next year's premiums by 20 November, and mid-year changes when you are told about them (§ 39 Abs. 4a EStG). Two figures go to payroll: the full premium that is the basis for the tax-free subsidy, and the basic-cover health and care premium for the Vorsorgepauschale (BMF, 8 December 2025).
- Be ready for the three-year insurer certificate. § 257 Abs. 2a S. 2 SGB V still requires you to give your employer, every three years, an insurer certificate confirming that BaFin has confirmed the insurer meets the legal conditions. HR may still ask for it.
- Foreign insurer: nothing is transmitted. Foreign insurers are not obliged to send data, so you must regularly give HR premium certificates for the subsidy to stay tax-free (BMF, 3 June 2025, Rn. 84).
- Check your payslip. The subsidy should appear as a separate line. The data alone create no right to a subsidy (Rn. 99), and you continue to pay your premium to the insurer yourself.
Wrong or missing figures are corrected through your insurer, because an insurer's paper certificate does not override the ELStAM data. For two years from the 2026 start, if premiums are missing or wrong for technical reasons, the employer may use a replacement paper certificate from the insurer (Rn. 107-108). A certificate from the tax office (Finanzamt) overrides the ELStAM figures (Rn. 83).
If you are moving from public cover, see our switching guide for the order of steps.
Is the employer subsidy to private health insurance taxable?
Within limits, no. The tax-free part of the subsidy is normally half of the premium your insurer transmits, capped at the maximum employer share for an employee in public insurance. This follows § 3 Nr. 62 EStG and the BMF letter of 3 June 2025 (Rn. 98).
Because the subsidy is tax-free, it also reduces the premium you can deduct as a special expense. See tax deductibility of premiums.
What conditions must the private insurer meet?
The subsidy is paid only if your insurer meets the statutory conditions in § 257 Abs. 2a SGB V. These include offering the Basistarif and waiving the right of ordinary termination for the comprehensive contract. Insurers that sell full cover to employees normally meet these conditions, but ask for confirmation in writing. You must give your employer an insurer certificate confirming this every three years (§ 257 Abs. 2a S. 2).
The same § 257 Abs. 2a SGB V certificate is the document many foreign nationals later need for a residence permit for employment, for example at the Berlin immigration office (Service Berlin: EU Blue Card). See our guide on private health insurance and visa requirements.
What changes in 2027?
The contribution ceiling is set to rise in 2027, which raises the maximum subsidy. The federal cabinet approved a health insurance ceiling of €76,500 a year (€6,375 a month) on 7 October 2026, and the Bundesrat still has to approve it, expected in November 2026. The 2027 average Zusatzbeitrag is not confirmed in the sources we checked, so we do not give a 2027 subsidy figure.
Frequently asked questions
Does my employer have to pay half of my private health insurance?
What is the maximum employer subsidy in 2026?
Do freelancers or self-employed people get an employer contribution?
Does my employer pay anything if I am a civil servant or a student?
How does my employer know how much to pay?
Is the employer subsidy to my private health insurance taxable?
Can I object to my insurer sending my premium data to my employer?
What happens to the subsidy if my premium rises?
Sources
- § 257 SGB V: Beitragszuschüsse für Beschäftigte (subsidy for privately insured employees, conditions for insurers)
- § 61 SGB XI: Beitragszuschüsse für Beschäftigte (care insurance subsidy)
- Deutsche Rentenversicherung: Rechengrößen 2026 (contribution ceiling, income threshold)
- Bundesministerium für Gesundheit: Beiträge der GKV (14.6% general rate, 2.9% average Zusatzbeitrag 2026)
- Techniker Krankenkasse: Beitragstabelle 2026 (care insurance rates)
- § 39 EStG: Lohnsteuerabzugsmerkmale (electronic transmission of premiums, objection)
- § 3 EStG: Steuerfreie Einnahmen (tax-free employer subsidy, Nr. 62)
- BMF letter of 3 June 2025: Datenaustausch private Kranken- und Pflegeversicherung (ELStAM procedure, foreign insurers, replacement procedure)
- BMF letter of 8 December 2025: Datenaustausch Lohnsteuerabzug ab 2026 (transmitted figures, objection)
- Bundesregierung: Beitragsbemessungsgrenzen 2027 (cabinet decision, Bundesrat approval pending)
- Service Berlin: EU Blue Card (insurer certificate under § 257 Abs. 2a SGB V)
Figures last checked on 19 October 2026. This guide is general information, not individual advice.
