Arbeitgeberzuschuss: employer subsidy in German private health insurance

What is the Arbeitgeberzuschuss?

The Arbeitgeberzuschuss is the monthly amount your employer is legally required to pay toward your private health insurance (PKV) and compulsory long-term care insurance (Pflegepflichtversicherung). The legal basis is § 257 SGB V for health and § 61 SGB XI for care. Functionally, it is the PKV mirror of the 50 % contribution an employer would pay for a GKV employee.

Only employees (Angestellte) receive the subsidy. Freelancers, self-employed, and civil servants do not, they pay their full PKV premium alone, though civil servants receive Beihilfe from their public employer instead.

How it is calculated

The formula has two parts, an amount and a cap:

• Amount: half of your actual premium, worked out separately for health cover and for long-term care (PPV)

• Cap: for each part, what an employer would pay for a GKV member at the current year’s BBG

In 2026 the two caps are:

• KV: €5,812.50 × 17.5 % ÷ 2 = €508.59 per month

• PPV: €5,812.50 × 3.6 % ÷ 2 = €104.63 per month

• Together at most: €613.22 per month (€584.15 in Sachsen). The caps are separate: room left under one does not raise the other

Below the caps, the employer pays half of each part. Where half of your health premium exceeds €508.59, the employer pays €508.59 for that part and you cover the rest alone. Long-term care works the same way against €104.63, but realistic PPV premiums stay well below that cap.

Concrete examples

A 32-year-old employee with a standard PKV premium of €520 per month (KV + PPV):

• Half of €520 = €260

• The cap is not hit: the employer pays €260, the employee pays €260 net

A 48-year-old employee with a premium of €1,400 per month including several supplementary modules:

• Half of the health part is well above €508.59, so the employer pays €508.59 for health cover

• For long-term care it pays half of the PPV premium, far below €104.63, so the total lands around €550 rather than €613.22

• The employee pays the rest, around €850, alone

The caps are the reason premium tariffs at older ages start to feel expensive relative to the GKV. Up to them, a PKV member gets a roughly fair split. Above the health cap, every additional euro is on the employee’s tab.

Two quiet facts most expats miss

No subsidy during maternity or parental leave

During maternity leave (Mutterschutz) and parental leave (Elternzeit), the employer pays no wage in the tax sense, so there is no taxable base for the subsidy. The premium continues to run; the employee covers the full amount during that time. Some tariffs include a Beitragsbefreiung during parental allowance (Elterngeld), worth checking before you sign a new contract.

Family premiums count within the health cap

If your own premium leaves room under the €508.59 health cap, premiums for privately insured children or a spouse without own income can fill it. There is one health cap for the whole family, not one per person, and it cannot borrow from the long-term care cap. Children pay no PPV premium at all.