Social Insurances set to Increase in 2014

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Increase in salaries in Germany can be a good and a bad thing. A good thing because your payslip has more numbers but a bad thing because your taxes go up and eventually you end up with same amount or less than before your raise 🙁

Come 2014, the social insurances (sozialbeiträge) are set to increase. According to the Süddeutsche Zeitung that announced this development, the  social insurance is set to increase for high earners across the country.

According to the article, the Federal government will be increasing the assessment threshold (Bemessungsgrenze) thus higher taxes. Anyone in West Germany earning more than €5950 a month will have to pay extra for the government pension scheme and the unemployment insurance while in East Germany the threshold is a bit lower at only €5000 due to lower salaries in the region. The current contributions to the pension scheme are 18.9% and for the unemployment insurance 3% of the gross total income.

There will also be an increase in the state health insurance which is currently at 15.5% of the gross income with the employer paying 7.3% and the employee paying 8.2% of the total. This will be uniform across the Federation and the threshold will increase by €112.50 to become €4050.

So for anyone earning anything above €3937,50 gross a month, look forward to the hiked taxes from Jan 2014. You might be going home with less than €400 a month.

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