Company Pension Calculator 2026
Calculate your German company pension: up to €676 tax-free per month, mandatory 15% employer contribution, net cost and funding rate at a glance.
As of September 2026Basis: § 3 no. 63 EStG, § 1 (1) no. 9 SvEV, § 1a BetrAVGCalculated in your browser – your inputs are not transmitted and are kept on this device only if you choose
Free of social security up to €338, tax-free up to €676 a month (2026).
I earn € gross a month, tax class , church tax. I am years old and retire at .
More detailsEmployer top-up 15% · Direct insurance
By law 15%, as far as your employer saves social security contributions (§ 1a (1a) BetrAVG). Many pay more.
Scheme type
Your net cost
per month
€84.69
€84.69A salary sacrifice of €200 costs you only €84.69 net. With €30 from your employer, €230 goes into your company pension – funding rate 172%.
Who pays your contribution of €230.00?
- You (net)€84.6937%
- Tax savings€73.0132%
- Social security savings€42.3018%
- Employer top-up€30.0013%
- Funding rate (state and employer)
- 171.6%
- Contribution to the pension
- €230.00
RZ-26 · headon.pro
Your capital until retirement
Your own net cost, plus funding from the state and your employer and the returns (Direct insurance). Drag the end of the curve to change your retirement age.
Net cost versus capital
After 32 years
Payout phase: what arrives net?
About €318.18 company pension net per month. After about 8.5 years of pension payments you have your own net outlay back.
From your pension statement. The tax on the company pension is then calculated instead of estimated
- Capital at retirement (forecast)
- €149,255.00
- Company pension gross (approx.)Assumption: 4% of the capital per year as a lifelong pension
- €497.52
- Health and care insurance on the company pensionFull contribution rate incl. additional contribution (Section 248 SGB V), health insurance allowance under Section 226(2) SGB V; care insurance without allowance
- − €70.37
- Income tax on the company pensionEstimate: 60% of today's marginal rate – more precise with the statutory pension
- − €108.96
- Company pension net (approx.)
- €318.18
- Pension years until the net outlay is back
- 8.5 years
What you can do
Up to €338 the sacrifice is free of social security
Sacrifice €50 more
costs you only €21.17 more net a month and adds about €37,638 of capital.
Taxed and charged in retirement
Company pensions are fully taxed in retirement. Retirees with statutory health insurance also pay the full health insurance rate on the portion above the monthly allowance of €197.75 (2026, § 226 (2) SGB V) and — once the equally high exemption threshold is exceeded — long-term care insurance contributions on the entire company pension. This is how it is calculated here.
How this was calculated
- You (net)
- €84.69
- Gross sacrifice
- €200.00
- Tax savings
- €73.01
- Social security savings
- €42.30
- Employer top-up
- €30.00
- Contribution to the pension
- €230.00
- Funding rate (state and employer)
- 171.6%
- Term
- 32 years
- Annual contribution
- €2,760.00
- Capital at retirement (forecast)
- €149,255.00
- Company pension gross (approx.)
- €497.52
- Company pension net (approx.)
- €318.18
- Free of social security: 4% of the pension insurance ceiling (€338 a month, 2026)
- Tax-free: 8% of the pension insurance ceiling (€676 a month, § 3 no. 63 EStG)
- Employer top-up: 15%, mandatory only as far as the employer saves social security contributions (§ 1a (1a) BetrAVG)
- Legal right to salary sacrifice (§ 1a BetrAVG)
- Company pensions are subject to full health and long-term care contributions.
- Capital and pension are forecasts using a cautious return assumption per scheme type.
German Company Pensions 2026: How Salary Sacrifice (Entgeltumwandlung) Works
The company pension (betriebliche Altersvorsorge, bAV) is an attractive form of retirement provision in Germany. Through salary sacrifice (Entgeltumwandlung), you save income tax and social security contributions, while your employer pays a mandatory top-up of 15%.
The big advantage: out of a €200 gross salary sacrifice, often only around €100 net cost remains – you save half through tax and social security relief. Add the employer top-up, and your actual savings amount increases significantly.
The Most Important Implementation Options for a Company Pension
- Direktversicherung (direct insurance)
- The most common form: the employer takes out a life insurance policy for the employee.
- Pensionskasse (pension fund)
- Similar to direct insurance, but a legally independent pension institution.
- Pensionsfonds (pension investment fund)
- Allows a higher equity share, offering higher return potential with more risk.
- Unterstützungskasse (support fund)
- No cap on tax-free contributions, typically used for executives.
Example Calculation: Company Pension at €4,500 Gross Salary
Factors That Determine Your Company Pension Savings
- 1Tax bracketThe higher your marginal tax rate, the greater your tax savings from salary sacrifice.
- 2Amount sacrificedUp to €338, you save both tax and social security; up to €676, only tax.
- 3Employer top-upA minimum of 15% is mandatory; some employers voluntarily pay more.
- 4Implementation optionPension investment funds offer higher return potential, direct insurance offers more security.
- Gross salary sacrifice
- €200
- Tax savings (approx. 27%)
- - €54.31
- Social security savings (approx. 21%)
- - €42.30
- Net cost
- €103.39
- Employer top-up (15%)
- + €30
- Actual savings amount
- €230
Company Pensions: Advantages and Disadvantages
The company pension offers substantial tax and social security advantages during the saving phase. However, in retirement you must pay full health and long-term care insurance contributions on the company pension payout.
Advantages of a Company Pension
- Tax savings
- Pay in up to €676 tax-free per month – saving up to €304 depending on your tax rate.
- Social security savings
- Up to €338 per month is exempt from social security contributions – an additional saving of about 20%.
- Employer top-up
- A minimum of 15% is mandatory – many employers voluntarily pay more.
- Insolvency protection
- Depending on the implementation option, protected by the Pensions-Sicherungs-Verein (PSV, § 7 BetrAVG) or the life insurers’ guarantee schemes.
Disadvantages and Criticisms
- Full health/care contributions in retirement
- On company pension payouts, you pay the full health and long-term care insurance contribution.
- Lower statutory pension
- Fewer statutory pension contributions mean fewer pension points.
- Limited flexibility
- Capital is usually only available from age 62, with no early withdrawal.
- Dependence on the employer
- The employer determines the implementation option and provider.
Frequently Asked Questions About the Company Pension
Everything important about salary sacrifice, funding limits and employer top-ups
What is salary sacrifice (Entgeltumwandlung)?
With salary sacrifice, you give up part of your gross salary and invest it in your retirement provision instead. The advantage: the amount is deducted before tax and social security contributions, so your net cost is significantly lower than the gross amount.
How much of a company pension is tax-free?
In 2026, contributions of up to €676 per month (8% of the contribution assessment ceiling) are tax-free. Contributions of up to €338 per month (4% of the ceiling) are exempt from social security contributions. Contributions above these limits are subject to tax and/or social security contributions.
Does my employer have to pay a top-up?
Yes. For salary-sacrifice agreements concluded since 1 January 2019, your employer must pay at least 15% of your sacrifice amount as a top-up if the employer saves social security contributions as a result (§ 1a (1a) BetrAVG). For older contracts concluded before 2019, the obligation has applied since 1 January 2022 (§ 26a BetrAVG).
Is a company pension worth it?
A company pension is particularly worthwhile due to the tax and social security savings as well as the employer top-up. However, in retirement you must pay full health and long-term care insurance contributions on the company pension payout. With a high income and a good employer top-up, a company pension is usually advantageous.
What happens if I change jobs?
Your company pension contract can generally be transferred to your new employer (portability). Alternatively, the contract can be made premium-free or continued privately. Contributions and top-ups already paid in remain intact.
How much is tax-free for a company pension in 2026?
In 2026, contributions to a company pension are tax-free up to 8% of the contribution assessment ceiling (BBG RV) – that is €676 per month (€8,112 per year). Contributions are exempt from social security up to 4% of the ceiling, i.e. €338 per month (€4,056 per year). Contributions above these limits are subject to tax and/or social security contributions.
Is salary sacrifice worthwhile for me?
Salary sacrifice is generally worthwhile if your employer tops up more than the mandatory 15%, if you are in a higher tax bracket (from around 30%), and if you can offset the reduced statutory pension through other retirement provision. Caution: in retirement, you pay the full health and long-term care insurance contribution (around 21% combined in 2026) on the company pension – for health insurance only above the exemption amount of €197.75/month, while for long-term care insurance that amount is merely a threshold (once exceeded, contributions are due on the full pension). Our company pension calculator shows you the exact net benefit.
What is the difference between direct insurance and a pension fund (Pensionskasse)?
Both options benefit from tax and social security relief. The main difference: direct insurance (Direktversicherung) is a life insurance policy that the employer takes out for the employee – the classic and most widespread option. A Pensionskasse is an independent pension institution and is often somewhat more flexible in how the capital is invested. In both cases, the same tax-free limits apply (2026: €676/month). Your employer usually determines which implementation option is offered.