Annual pay threshold (JAEG)

The annual pay threshold (Jahresarbeitsentgeltgrenze) is set by the Federal Ministry of Labour and Social Affairs (BMAS) and is adjusted annually to reflect factors such as inflation.

The annual pay threshold (JAEG) is the dividing line between compulsory public health insurance (GKV) and the option of private health insurance (PKV)

The Federal Ministry of Labour and Social Affairs has announced that the annual pay threshold in 2021 will be €64,350.

If your annual income is below this threshold, you are obligated to choose a health insurance provider in the public health insurance system (GKV).

If your annual income is equal to or above the threshold, you can choose either public health insurance (GKV) or private health insurance (PKV). Some groups, such as the self-employed, civil servants and the clergy, always have the freedom to choose between the two systems.

It is important not to confuse the annual pay threshold (Jahresarbeitsentgeltgrenze) with the premium assessment ceiling (Beitragsbemessungsgrenze), which is used to calculate public (statutory) health insurance premiums.

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