Social insurance system

Social insurance contributions in Germany are roughly shared equally by employer and employee. The employer withholds and distributes them to the social insurance institutions. In marked contrast to some other industrialized countries, the core social security in Germany is financed collectively by means of a process of redistribution. The current social costs (e.g. for pensioners, sick people and/or those in need of nursing care and unemployed people) are paid directly from contributions by employees and employers. 

Generally speaking, social security contributions are roughly shared equally by employer and employee. Only the costs for accident insurance are exclusively borne by the employer. In total, the employer’s share of social insurance contributions amounts to approximately 21 percent of the employees gross wage.

A common fund exists for all social security components. Only the health insurance provider can be chosen individually by the employee. Employees in Germany receive a net wage or salary from which tax and social security contributions have already been deducted. The employer withholds the tax that the employee is required to pay and transfers the money directly to the tax office (Finanzamt). Accordingly, all employees must be registered with the local tax office.

Social security contributions are also withheld by the employer after calculation of the gross wage and transferred to the employee’s health insurance company (which then distributes all of the contributions excluding accident insurance to all relevant parties). The employer separately has to pay the contributions for the accident insurance to the relevant Employers’ Accident Insurance Association (Berufsgenossenschaft).

_{(1) plus minor allocations
(2) plus additional contribution which each health insurance company individually may impose on employer and employee (equal shares). The average additional contribution for 2025 defined by the Federal Ministry of Health is 2.5 %.
(3) The employee's contribution for nursing care depends on the employee's number of children under 25.
(4) average accident insurance contribution 2024 according to German Social Accicent Insurance (DGUV)}

International coordination of social insurance systems

In order to facilitate the international transfer of employees, Germany has signed social insurance agreements with countries including e.g. Australia, Brazil, Canada, China, India, Israel, Japan, South Korea, Turkey, and the USA.

Within the EU, the dispatch of employees is facilitated by EU regulations on social security coordination. This allows transferred employees to remain within the national social insurance of their home country, if they are posted to Germany for a certain time. In this case, the employer does not have to pay German social security contributions for the employees temporarily located in Germany. 

Social security in North Rhine-Westphalia

To complement general social legislation and the associated advisory and service infrastructure in Germany, North Rhine-Westphalia provides additional services.

Health and safety at work

To ensure that employers can meet the legal requirements for the protection of employees at the workplace, the state of North Rhine-Westphalia has set up advisory centersat the five regional governments. Here, companies and employees can obtain advice on all matters relating to health and safety at work. In addition, the State Institute for Health and Safety at Work provides scientific information on related topics. 

Further information

Education Check

Science and technology are constantly producing new knowledge which affects the world of work. To be able to remain competitive in the market, companies need employees who are prepared to undergo further training. With the Education Check, North Rhine-Westphalia provides both employers and employees with an incentive to take advantage of professional training opportunities. The Education Check is aimed at companies with a maximum of 50 employees who have a particular demand for further training. When a company’s employees undergo further training, the state of North Rhine-Westphalia covers half of the cost – to a maximum of EUR 500 per Education Check.

Throughout the state, there are around 175 counseling centers providing detailed advice.

Store opening times

In Germany, the federal states are responsible for the regulation of the store opening times. Since 2018, the following rules have applied in North Rhine-Westphalia: From Monday to Saturday, business proprietors can determine their opening times without any revstrictions from midnight to midnight. Sunday is protected on principle and not a sales day. However, cities and municipalities have the possibility to determine special openings for up to eight Sundays a year. 

This does not affect conditions for employees with regard to labor law.

Further information