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Social security in Germany explained

Updated: Aug 20, 2022

People who live and work in Germany contribute to the German Sozialversicherungssystem or social security. This is a collectively-financed system and it is designed to protect the livelihood of the people who need additional support.

The system is mainly designed to support people with low income with various allowances and benefits to overcome their struggle in maintaining their livelihood although most of the unforeseen events in life are covered by the insurance.

Social security ID (Sozialversicherungsausweis)

Once you start making contributions to a statutory insurance scheme, you will get a social security ID (Sozialversicherungsausweis) to prove that you are a contributor to the system. The Social security ID is necessary to start a new job, claim benefits, or to start drawing pension.

Benefits from German social security

The German social security system facilitates various benefits and allowances as well as statutory health insurance, pension insurance, unemployment insurance, etc. The benefits are available to anyone who are in need to cover their basic subsistence costs such as rent and raising children:

Maternity benefit (Mutterschaftsgeld)

You are entitled to maternity benefit for six weeks before and at least eight weeks after the delivery if you are a member of a statutory health insurance scheme. You may claim benefits from the Federal Insurance Office if you are not covered by a statutory insurance scheme.

Parental allowance

Elterngeld or parental allowance is provided to both father and mother to support them during the first months of the delivery. The benefit covers the loss of income and helps both the parents to spend time with their new baby.

Child benefits

Child benefits or kindergeld supports parents for raising their children and providing them with basic things like food, clothing, education, etc. Child benefit is available to almost all parents in Germany.

Child sickness benefit (Kinderkrankengeld)

If your child is sick, you are entitled to take time off from work to take care of the child. While some employers pay your salary during this period, the public health insurance provider will support you otherwise. The Kinderkrankengeld also reimburses the loss of earnings partially.

Sickness benefit (Krankengeld)

You are automatically qualified for sickness benefit if you contribute to a statutory health insurance scheme. If you are unable to work due to illness, you will be covered for up to 78 weeks, either by your employer or by your health insurance provider.

Housing benefit (Wohngeld)

German social security provides housing benefits to those who have lower incomes to ensure everybody has adequate, family-friendly housing.

You may apply for the housing benefit if you need support for rent (Mietzuschuss), or mortgage and home support (Lastenzuschuss), if you own a house.

German statutory insurance system

You are obliged to contribute to social security if you are employed in Germany. However, the contribution is split evenly between the employer and the employee. The average total social security contribution is around 20 - 22% of your salary.

The monthly deducted social security contribution cover the following aspects:

Statutory Health Insurance

Unless you are self-employed or your annual income is more than 64000€, almost everyone is required to contribute to statutory health insurance. You can also choose to get private health insurance or voluntarily contribute to statutory health insurance if you are self-employed or your annual income is more than 64000€.

Pension insurance (Rentenversicherung)

You are obliged to participate in a pension insurance scheme if you work in Germany. Over time, your contributions build up to provide you with a basic provision for your retirement. However, you have a chance to choose whether to opt into the statutory pension insurance scheme or start a private pension plan if you are self-employed.

Unemployment insurance (Arbeitlosenversicherung)

Employees in Germany are required to contribute to arbeitlosenversicherung unemployment insurance. These contributions are used to provide unemployment benefits to anyone who is out of work.

Occupational accident insurance (Unfallversicherung)

Occupational accident insurance offers protection and assistance in the event of accidents or job-related illnesses happening at your workplace. If you are employed or in occupational training, you are automatically covered, no matter how much you earn. The insurance scheme also covers school-age children and students. If you are self-employed or run your own business, you can get voluntary insurance for yourself

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