Germany's Payroll Taxes Hit Record High in 2025

Increased health and care insurance contributions drive payroll tax rates to 42.3%, the highest in the nation's history.

The average payroll tax rate in Germany rose to 42.3% in January 2025, surpassing the previous record set in the late 1990s.
Health insurance contributions increased from 16.3% to 17.5%, with the average additional premium climbing to 2.91%.
Care insurance contributions also rose, further contributing to the overall tax burden, while pension and unemployment insurance rates remained unchanged.
The higher payroll taxes impact both employees and employers, with critics warning of reduced take-home pay and negative effects on Germany's economic competitiveness.
Opposition leaders have criticized the government for mismanagement, citing missed opportunities to reform healthcare funding and rising costs for hospitals and medications.