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Germany Sets 2026 Pension and Pay Rules as Experts Flag Rising Social Costs

Analysts warn rising social contributions will strain workers.

Overview

  • Lawmakers approved a pension package that keeps the 48% pension-level floor through 2031 and suspends the sustainability factor, with 318 votes in favor.
  • A nationwide pension increase of about 3.73% is projected to take effect on July 1, 2026, pending final confirmation in the spring.
  • The new Aktivrente starts in 2026, allowing employees past retirement age to earn up to €2,000 per month tax-free while continuing to work.
  • Contribution ceilings rise in 2026 to €69,750 per year in statutory health insurance and €8,450 per month in pension insurance, as institutes note total social contributions already exceed 42% and economists caution against extending guarantees beyond 2031.
  • Other 2026 changes include a €13.90 minimum wage, a unified €0.38-per-kilometre commuter allowance from the first kilometre, higher public-transport fares including a €63 Deutschlandticket, and a higher CO2 price that increases heating and fuel costs.