Most employees working in Germany are obliged to take part in the statutory social insurance system and are therefore protected against financial risks, for instance due to unemployment, getting ill or needing long-term care.
Five branches of social insurance
- Health Insurance
Health insurance covers necessary costs in case of illness as well as many healthcare costs and rehabilitation measures. As an employee you're generally obliged to take part in the statutory health insurance scheme. If you are self-employed or if your annual income is higher than the compulsory insurance threshold (as of 2020: EUR 62,550), you can decide whether you wish to insure yourself by public health insurance or private health insurance.
- Long-Term Care Insurance
You can benefit from long-term care insurance in case you are unable to take care of yourself due to illness or old age.
- Pension Insurance
The pension insurance pays a monthly pension when you retire.
- Unemployment Insurance
When you become unemployed, the unemployment insurance system provides financial support for a certain period of time. The prerequisite is that you have been insured for at least one year in the past two years, and that you continue to look for work.
- Accident Insurance
The accident insurance covers all costs in the event of an accident or occupational illness.
Who is insured?
- In principle, all employees are subject to compulsory statutory social insurance.
- For self-employed persons, the insurance obligation does not apply to pension insurance, unemployment insurance and accident insurance. Self-employed persons have to insure themselves in a public or private health and long-term care insurance.
However, not exempt from the obligation of insurance are the following groups: Craftsmen, homeworkers, teachers, midwives, educators and care workers, artists and journalists, self-employed persons with a client, sea pilots, coastal skippers and coastal fishermen. They are subject to compulsory statutory social insurance.
- The social security system is financed by contributions of employers and employees, usually divided equally between them. Only the contributions to accident insurance are fully paid by the employer.
- The employee’s contributions are deducted from their gross salary. The employer’s contributions to the social insurance are paid directly by the employer.
The documents available for download below offer more detailed information on the various insurance branches.