In 10 years, workers in Germany will give half of their salaries to social taxes 0 8

Germany is approaching a threshold of social overload: the rise in social contributions is already alarming. According to a study by the Berlin Institute IGES, commissioned by the health insurance company DAK-Gesundheit, by 2035 the total rate of social contributions in Germany could reach 50%, and under unfavorable conditions — almost 54%. This means that every second euro earned by an employee will go to insurance contributions — pension, health, unemployment, and care insurance.

Not long ago, employers hoped to keep this figure below 40%, but the situation has changed. By January 2025, the burden reached 42.7%, and the trend is upward, warns tagesspiegel.de.

The head of DAK-Gesundheit, Andreas Storm, called the results of the study "the last warning" and demanded coordinated actions to reform the system. He reminded that similar measures were implemented in Germany in the 1970s, when the government, insurers, and medical organizations jointly sought ways to reduce costs.

Storm proposed a nationwide dialogue that would allow for the development of systemic solutions instead of temporary measures.

Threatening figures: a deficit in the billions of euros

Researchers predict that by 2027, the social insurance system will face a deficit of more than 17 billion euros.

Of this:

• 11.8 billion euros — shortfall in the health insurance system (GKV);
• 5.5 billion euros — deficit in care insurance (SPV).

The increase in expenses is associated with rising healthcare costs, the cancellation of temporary federal subsidies, and the increase in pharmacy rates.

Contributions are rising in all directions

According to IGES calculations, the total rate of social contributions will be:

43.6% in 2026, up to 47% by 2029, about 50% by 2035 (in an unfavorable scenario — 53.7%).

Without reforms, rates for individual types of insurance could rise to record levels:

• pension insurance — up to 21% (currently 18.6%);
• health insurance — up to 20.6% (currently 17.7%);
• care insurance — up to 4.9% (currently 3.8%);
• unemployment insurance — up to 3.4% (currently 2.6%).

Loans and "small packages" do not solve the problem

Health Minister Nina Warken (CDU) previously presented the so-called "small savings package" and approved short-term federal loans to stabilize rates. However, as noted by the head of the study, Richard Ohmann, these measures only work temporarily. The gap between the system's income and expenses continues to grow.

DAK's plan: 3 steps to financial stability

Storm proposes to introduce a three-stage "Stability Pact" that should balance the expenses and income of the insurance system by 2029.

Key steps:

• limit the growth of expenses — they should only increase along with income;
• reduce VAT on medicines and medical devices from 19% to 7%, which will save about 5.3 billion euros;
• compensate for budget losses by increasing excise taxes on tobacco and alcohol;
• from 2028, finance insurance payments for Bürgergeld (unemployment benefit) recipients directly from taxes.

Structural reforms are necessary

DAK also demands a deep restructuring of the entire healthcare system.

Among the proposals:

• creating a more efficient primary healthcare system;
• reforming hospitals and emergency services;
• increasing the efficiency of financing medical institutions.

According to Storm, such reforms need to start now so that by the end of the decade they begin to yield results.

If the IGES forecast is confirmed, workers in Germany will give more than half of their income to social funds. The increase in social contributions will not only increase the burden on households but may also weaken the competitiveness of the German economy.