German Cabinet Approves Higher Social Contributions for High Earners

The increase in contribution limits awaits Bundesrat approval, contingent on passing tax relief measures in the Bundestag.

Germany's cabinet has approved raising the contribution assessment limits for social insurance, impacting high earners the most.
The Bundesrat is expected to review the measure on November 22, pending Bundestag approval of tax relief plans by Finance Minister Christian Lindner.
Lindner advocates for automatic annual tax rate adjustments to inflation, a proposal currently facing opposition from the Green party.
The new regulation will see significant increases in contribution limits for both pension and health insurance, reflecting a 6.4% wage growth rate in 2023.
While social contributions will rise, Lindner's tax relief plans aim to reduce the tax burden by adjusting tax brackets and allowances.