Your net salary depends on far more than just your gross salary. Taxes, social contributions, and especially your health insurance determine how much actually ends up in your bank account. Here you’ll find a clear, easy-to-understand overview of the key changes that matter in 2026 — particularly for high earners, self-employed workers, and expats.
Seeing a German payslip for the first time can feel overwhelming — lots of abbreviations, technical terms, and unfamiliar deductions. But once you understand the basic structure, the relationship between gross and net salary becomes clear. And depending on your situation, there are different ways to optimise your monthly deductions.
Germany uses a progressive income tax system. How much you pay depends on your total income, tax class, marital status, children, and any applicable allowances. These allowances (such as the basic tax-free allowance) are regularly updated and help reduce your overall tax burden.
Only higher earners pay the solidarity surcharge. Starting in 2026, it becomes due once your income tax exceeds €20,350 — which corresponds to a taxable income above €75,000.
If you’re a member of a church that collects tax (e.g., Catholic or Protestant), you pay 8% or 9% of your income tax as church tax, depending on your federal state.
If you leave the church (for example, at the local Bürgeramt), this deduction disappears entirely.
In addition to taxes, several mandatory social security contributions are deducted from your salary: pension insurance (Renetenversicherung = RV), unemployment insurance (Arbeitslosenversicherung = AV), long-term care insurance (Pflegeversicherung = PV), and health insurance (Krankenversicherung = KV).
These rates are legally defined and split between employer and employee.
Health insurance has the biggest impact on your net salary — because it’s the only area where you, as an employee, can actively choose between statutory (GKV) and private (PKV) health insurance, depending on your income and health status.
Two important thresholds increase in 2026:
Contribution ceiling (Beitragsbemessungsgrenze – BBG) for health & long-term care: €5,812.50 per month (€69,750 per year)
Contributions are only calculated up to this amount — income above it is not subject to health or long-term care contributions.
Mandatory insurance threshold (Jahresarbeitsentgeltgrenze – JAEG): €6,450 per month (€77,400 per year)
If you earn more than this, you may switch from statutory health insurance (GKV) to private health insurance (PKV).
Statutory health insurance (GKV)
Contributions depend on your income (up to the BBG).
Each public health insurance charges its own additional contribution rate.
Family members can often be insured free of charge.
Your employer pays half of the health insurance contribution.
Private health insurance (PKV)
Contributions do not depend on income — instead they depend on age at entry, health status, and the scope of coverage in your chosen tariff.
Often provides better benefits (e.g., dental care, worldwide coverage, faster access to specialists).
Your employer pays a 50% subsidy — capped at the maximum GKV employer contribution (613,22 € in 2026).
Financially interesting for high earners and many expats.
Whether you, as an employee, are allowed to choose depends on the JAEG. In 2026, this threshold is €77,400 gross per year.
If your regular annual salary is higher than this, you may switch from GKV to PKV.
For self-employed individuals and civil servants, the JAEG does not apply — they can choose PKV regardless of income.
A review of your insurance situation is especially worthwhile if:
Your income as an employee exceeds the 2026 JAEG (€77,400 per year)
You are self-employed, freelancer, student or a civil servant
You want more comprehensive benefits (free choice of doctors, single room in the hospital, dental cleaning and prostheses, vision aids, preventive check-ups, worldwide coverage)
You value personalised tariffs and better service
Keep in mind:
PKV premiums depend on your age at entry — earlier entry is and stays more affordable.
Pre-existing conditions may lead to premium surcharges.
Self-employed individuals must factor in fluctuating income.
Each family member pays their own PKV premium (but a kid's premium is much lower).
Switching to PKV should be a long-term decision (returning to GKV later can be difficult depending on age, income, and job status).
Gross salary/month: €6.667 |
|
Income tax: ~€1490 |
|
Church tax: ~€105 |
|
Soli: ~€0 |
|
Pension insurance: ~€620 |
|
Unemployment insurance: ~87 € |
|
Health & long-term care (employee share): ~648 € |
|
➡ Net/month: ~3.900 € |
Gross salary/month: €6.667 |
ottonova Premium Economy |
ottonova Business Class Pro |
ottonova FirstClass Pro+ |
Income tax: ~€1503 |
Income tax: ~€1490 |
Income tax: ~€1490 |
|
Church tax: ~€120 |
Church tax: ~€120 |
Church tax: ~€119 |
|
Soli: ~€0 |
Soli: ~€0 |
Soli: ~€0 |
|
Pension insurance: ~€620 |
Pension insurance: ~€620 |
Pension insurance: ~€620 |
|
Unemployment insurance: ~ €87 |
Unemployment insurance: ~ €87 |
Unemployment insurance: ~ €87 |
|
Health & long-term care (employee share): ~€284 |
Health & long-term care (employee share): ~€331 |
Health & long-term care (employee share): ~€358 |
|
➡ Net/month: ~€4.053 (= €153 monthly savings) |
➡ Net/month: ~€4.020 (= €120 monthly savings) |
➡ Net/month: ~€3.992 (= €92 monthly savings) |
For young, healthy employees earning above the income threshold (€77,400/year), switching to PKV offers significant savings potential.
For older individuals, people with serious pre-existing conditions, or families with many children who are insured free of charge in public health insurance, the statutory insurance system may be the more financially advantageous option. But when you calculate in limit of coverage in public health insurance and what an additional top up insurance would cost, it can still, and often is, beneficial.
Which system is right for you? All you need to know about the German health insurance system.
Consider switching to PKV if you’re self-employed or earn above €77.400 → Depending on age, health status, and tariff
Optimise your tax class → Especially relevant for married couples
Use employer benefits (e.g. Company pension scheme, Non-cash benefit cards, Job ticket for public transport, Company bike)
File a tax return → Many employees receive between €600 and €1,200 back each year
To reduce even more you could also consider to deregister from the church so you don't have to pay any church tax.
The tax in Germany isn’t as hard as you think. We’ll help you learn the ins and outs of taxes for expats, including tax brackets, the easiest deductions you can submit, and more.
Medical expenses can be expensive. What you can deduct from your taxes and where you can claim medical expenses on your tax return
Moving to a new country can be complex. Our straightforward article gives an overview of the German healthcare system and the options open to expats.
Our ottonova team of experts has over 40 years of experience in the field of private health insurance and answers questions about it every day. What are old-age provisions and for whom does private health insurance make sense? What is the actuarial interest rate and which tariff is right for you? They know!
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