Current for 2026•As of: July 2026

Company Pension Calculator 2026 Calculate Salary Sacrifice (bAV).

Calculate your German company pension: up to €676 tax-free per month, mandatory 15% employer contribution, net cost and funding rate at a glance.

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Salary & Tax

€
1,500 €15,000 €

Salary Sacrifice

€
0 €676 €
%
15% (min. 15%) %100% (min. 15%) %

Savings phase

years
18 years60 years
years
62 years70 years

Company pension funding 2026

  • Tax-free up to 676 €/month (8% of the ceiling)
  • Social-security-free up to 338 €/month (4% of the ceiling)
  • Employer top-up: 15%, to the extent the employer saves social security contributions (Section 1a (1a) BetrAVG)
  • Legal entitlement to salary sacrifice

Your Company Pension Figures

Funding rate

171.6 %

state + employer funding

Effective contribution

84.69 €

per month (net)

Est. net pension

318.18 €

per month (approx.)

Your Contributions

Your contribution (salary sacrifice)200.00 €
Employer top-up+30.00 €
Total monthly contribution230.00 €

Your Monthly Savings

Gross salary sacrifice200.00 €
Tax savings-73.01 €
Social security savings-42.30 €
Net cost84.69 €

Funding Limits 2026

Social-security-free up to

338.00 €

Tax-free up to

676.00 €

Forecast (at 3-4% return)

Term32 years
Annual contribution2,760.00 €
Estimated final capital149,255.00 €
Gross pension (approx.)497.52 €
Net pension (approx.)318.18 €

Your Total Funding (monthly)

Employer top-up

30.00 €

Tax

73.01 €

Social security

42.30 €

Notes:

  • Company pensions are fully taxed in retirement and are subject to full health and long-term care insurance contributions.

Calculation based on:

  • Social-security-free amount: 4% of the contribution ceiling (€338/month in 2026)
  • Tax-free amount: 8% of the contribution ceiling (€676/month in 2026)
  • Employer top-up: 15% since 1 Jan 2022, legally required only to the extent the employer saves social security contributions (Section 1a (1a) BetrAVG)
  • Full health and long-term care contributions apply to company pensions

Important note

These calculations are for non-binding information only and do not replace professional tax advice. All information without guarantee. Learn more

Sources & calculation basis

Our calculations are based on the following official sources (as of: July 2026):

Related guides

Retirement Planning

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 5 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

Monthly salary sacrifice of €200

Monthly salary sacrifice of €200
ItemAmount
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

Factors That Determine Your Company Pension Savings

  1. Tax bracket: The higher your marginal tax rate, the greater your tax savings from salary sacrifice.
  2. Amount sacrificed: Up to €338, you save both tax and social security; up to €676, only tax.
  3. Employer top-up: A minimum of 15% is mandatory; some employers voluntarily pay more.
  4. Implementation option: Pension investment funds offer higher return potential, direct insurance offers more security.

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
Company pensions are protected by the Pensions-Sicherungs-Verein (PSV).

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

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.

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.

Yes, since 1 January 2022, your employer must pay at least 15% of your salary-sacrifice amount as a top-up for new contracts, if the employer saves social security contributions as a result of your salary sacrifice. For existing contracts, this has also applied since 1 January 2022.

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.

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.

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.

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 (about 18%) on the company pension. Our company pension calculator shows you the exact net benefit.

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.

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