Editor in chief at IamExpat Media
As usual in October, the German government has just released the new contribution assessment thresholds for social security in 2022. For the first time in a long while - and due to negative wage development last year - most of the thresholds will not rise.
The federal cabinet sets new calculator parameters for contributions to statutory health insurance, long-term care insurance and pension insurance every year. The calculation is based on a number of factors, primarily the development of salaries in Germany, and ensures that the social security system remains stable.
Anyone working in Germany is required to contribute a proportion of their income to social security every month - but only up to a maximum “assessment ceiling” that is recalculated every year. If the ceiling is raised, more of a person’s salary becomes subject to social security contributions; if it is lowered, the “taxable” portion gets smaller.
After many years of sustained wage growth in Germany, 2020 saw incomes fall, largely due to the coronavirus pandemic. Therefore, most contribution threshold ceilings will remain static in 2022. A few have even been lowered.
From January 1, 2022, the income threshold for statutory health insurance and long-term care insurance will remain at the same rate as it was in 2021: 4.837,50 euros per month (58.050 euros per year).
The compulsory insurance limit will also remain static at 64.350 euros per year (5.362,50 euros per month). Anyone who earns more than this is entitled to take out private health insurance if they wish.
When it comes to the income limit for pension insurance, there are a few differences - primarily because the government is still working to even out contributions for West and East Germany by 2024.
In West Germany, therefore, the income threshold for pension contributions will actually drop to 7.050 euros per month. In 2021, contributions were payable in the western federal states on up to 7.100 euros of monthly income. In the east, the threshold will rise slightly to 6.750 euros per month (up from 6.700 euros per month in 2021). For miners’ pension insurance, the limit will drop in the west to 8.650 euros per month and increase in the east to 8.350 euros per month.
The average earnings in the pension insurance - which is used to determine how many “pension points” an employee accrues for their contributions for the year, and therefore ultimately how high their benefits are when they retire - has been set at 38.901 euros for the year in 2022, down from 41.541 euros in 2021.