The first pillar of the German pension system is pension insurance (Rentenversicherung or RV), also known as statutory pension insurance (gesetzliche Rentenversicherung). It’s what might be referred to as a state pension or public pension in other countries around the world.
The pension insurance system in Germany functions as a “pay-as-you-go” scheme, under which contributions from the working-age population pay the pension benefits of the retired population. Both employees and employers are obliged to make monthly contributions to the pension insurance system, as are some self-employed workers and other population groups.
As of 2024, a portion of contributions is also invested on the stock market, to help maintain the long-term viability of the system.
The statutory pension insurance benefit is paid out to individuals from retirement age and provides basic payments of around 48% of your working net income - although this level is currently only guaranteed until 2025, when it will be reevaluated and possibly reduced further. There is also a safety net for low-income pensioners, and provision for anyone who becomes unable to work before reaching retirement age.
Since 2005, all regional and local branches of the German public pension insurance system have been brought under the unified title Deutsche Rentenversicherung.
There are several different types of state pensions in Germany, to cover different life circumstances:
Participation in pension insurance is mandatory for anyone working in Germany (and many self-employed workers as well), with each employee assessed based on annual earnings. This includes foreign workers who are employed in Germany.
Certain groups of individuals, including self-employed people with just one client, farmers, artists, journalists and members of professions organised into associations, like doctors, midwives, carers, architects, craftspeople, pharmacists, engineers, accountants and lawyers, are also obliged to contribute to statutory pension provision, although they might have alternative compulsory insurance arrangements specific to their profession. The same is true for civil servants in Germany.
People with mini- and midi-jobs in Germany who started their employment after December 31, 2012, are also subject to compulsory pension contributions, although they can ask to be exempted.
Anyone who is not obliged to contribute to pension insurance can, from the age of 16, still enrol themselves voluntarily and build up a pension entitlement. You can make voluntary contributions if one or more of the following apply to you:
If you make voluntary contributions to the German pension insurance system (freiwillige Pflichtversicherung), you can freely choose the number and amount of your contributions, provided they fall somewhere between the minimum and maximum contribution rates for that year - currently, this is between 100,07 and 1.404,30 euros per month. You can pay voluntary contributions for any calendar year until March 31 of the following year.
You can also make additional contributions for other periods in special circumstances, for instance, if you took time out from work to study.
It’s worth noting that you should carefully consider whether to voluntarily contribute to the pension insurance system, as once you have opted in it can be very difficult to revoke this decision. To become voluntarily insured, you need to apply to the Deutsche Rentenversicherung.
You cannot opt out of pension insurance if you are employed or work in a self-employed capacity in one of the professions subject to compulsory insurance (as outlined above). You may only opt out of pension insurance in certain marginal professions like mini-jobs, or if you are self-employed in a profession not subject to compulsory insurance.
For regular employees, statutory pension insurance is based on a contribution system.
Everyone is obliged to contribute 18,6% of their net salary up to a maximum contribution ceiling (Beitragsbemessungsgrenze). This contribution is split equally between the employer and the employee (9,3% each).
As of 2025, this monthly contribution ceiling is 8.050 euros per month. This is the first time that the threshold has been the same in all federal states. Previously, people in the new (eastern) federal states paid their pension contributions on a lower portion of their income, in part due to historically lower wages in the former GDR.
Once you are enrolled in the statutory pension scheme, you will receive a unique social security ID (Sozialversicherungsausweis). Whenever you start a new job, you will need to provide your employer with this number, so that they can keep track of all your pension contributions to date.
From the age of 27, anyone who has contributed to the statutory pension scheme in Germany for at least five years will receive an annual statement (Renteninformation) in the post, outlining their pension contributions. It includes the following information:
After you reach the age of 57, you’ll receive a more detailed breakdown of your pension every three years.
Once you reach retirement age, you can start receiving your statutory pension in Germany. Here’s what you need to know about the eligibility criteria for drawing a state pension, and how your benefit is calculated.
In order to be eligible to receive a German state pension, you need to have been working for a minimum of five years in Germany. This is known as the minimum qualification period (Mindestversicherungszeit). As well as time spent working, alternative situations are also considered contributory periods, such as:
In these instances, pension contributions will be taken from any government benefits you are entitled to. These periods of time can therefore count towards the minimum five-year requirement.
You don’t automatically receive your old-age pension once you reach retirement age in Germany. Instead, you’ll have to apply directly to the Deutsche Rentenversicherung, either online or in writing, at least three months before you reach retirement age. You’ll need to provide your:
The amount of state pension you receive in Germany depends on how much you have contributed. The contributions an individual makes throughout their working life accumulate to build up their pension entitlement. Not only the length of the contribution period is used in this calculation, but also how much the individual earned during that period.
A points-based system is used to calculate a retired person’s pension benefits. In a nutshell, a year’s contributions at the average earnings of all contributors (50.493 euros in 2025) earns one “pension point” (Entgeltpunkt). Contributions based on a lower or higher income earn proportionately fewer or more pension points (up to maximum of two pension points per year).
When you retire, your pension points are summed up and multiplied by the current “pension value” (aktueller Rentenwert) to calculate your pension benefits. As of July 1, 2024, the pension value is 39,32 euros. The more points you have, the higher your pension will be. If you choose to retire early or late, this will make your monthly pension payments go down or up.
Early retirement is possible in Germany, provided you are at least 63 years old and have made at least 35 years’ worth of contributions to the statutory scheme. You should be aware that retiring early will reduce your overall benefit. For each month that you would have had to work to reach retirement age, 0,3% is deducted from your pension entitlement. This is a reduction of about 3,6% per year. You can, however, avoid this by making special payments from the age of 50.
On the same basis, if you choose to work beyond retirement age, you’ll receive a higher pension. For each month you work beyond retirement age, you’ll get a 0,5% increase, equivalent to 6% per year.
If you have contributed to the system for at least 45 years, you can retire at age 63 without facing any penalties.
Pensions in Germany are subject to taxation and contributions to health insurance and long-term care insurance:
You pay income tax on your state pension in Germany. The proportion of your pension that is subject to taxation is gradually increasing, so the exact rate you pay will depend on the year in which you retire.
In 2005, 50% of the gross pension was recognised as taxable income; as of 2025, this has risen to 85%, and will continue to rise by 1 percentage point each year until 2040, when pensions will be 100% taxable for the first time. The standard income tax rates apply.
You are also obliged to continue contributing to certain social security schemes in retirement, namely health insurance and long-term care insurance.
Usually, once you start to claim your German pension you must start paying for compulsory pensioners’ health insurance (Krankenversicherung der Rentner). This will be deducted directly from your pension payments and remains at the standard rate of 14,6%. Half of this is paid by your pension provider, and half is deducted from your pension benefit.
You will also have to continue contributing to long-term care insurance. The standard rate of 3,4% is paid by you as the pensioner alone.
Pensioners are not required to contribute to pension insurance or unemployment insurance.
If you leave Germany before reaching retirement age, your contributions to the state pension are not lost. Depending on the circumstances, you might be able to claim a German pension when you retire, or you could get your contributions refunded.
If you worked for five years or more (the minimum contribution period), you will qualify to receive a (small) German pension when you retire. This can be paid out anywhere in the world, so it’s worth keeping the Deutsche Rentenversicherung updated with your current address and other details.
If you worked in Germany for less than five years and are a non-EU citizen, you can apply to have your pension contributions refunded. The prerequisite is that you haven’t worked in Germany for the past 24 months. If you are an EU citizen, usually your German pension contributions will count towards your state pension entitlement in the county where you retire.
After many years of negotiations, the federal government's basic pension scheme (Grundrente) came into force in January 2021, ensuring that everyone who has paid into the German pension system for a significant amount of time receives an adequate pension benefit.
In a nutshell, anyone who has contributed to the system for at least 33 years (both working years and time taken out to rear children or provide unpaid care count) will be paid a supplement on top of their regular pension to ensure a basic subsistence. The basic pension is calculated and paid out automatically; you do not need to apply.
The statutory pension in Germany is a minimum pension, and for many people will not provide a benefit that will allow them to maintain their standard of living beyond retirement. Therefore, plenty of people choose to make up the gap by contributing to company pensions and/or private pensions.