Workplace pensions
made easy.
Build retirement income
with support from your employer.
An occupational pension—betriebliche Altersversorgung, or bAV—lets you save through your workplace. Employer contributions and tax advantages can make it attractive. The right decision depends on the scheme, what it costs you today and what you receive after tax in retirement.
HOW BAV WORKS
Turn part of your salary into future income
Salary conversion
Entgeltumwandlung
You redirect future gross salary into a pension arranged through your employer. Eligible employees can generally request conversion up to 4% of the statutory pension contribution ceiling. Your employer normally selects the scheme.
Employer support
adds to your saving
For the usual insured routes, the employer generally adds 15% of converted salary to the extent it saves social-insurance contributions. Collective agreements can differ. Some employers offer more generous contributions.
| Monthly illustration | Amount |
|---|---|
| Gross salary converted | €200 |
| Employer contribution | €30 |
| Total into the pension | €230 |
| Possible take-home pay reduction | Around €100 |
Illustration only. Tax and social security savings depend on your circumstances; payroll can calculate your actual net cost.
Employer support and salary conversion: BMAS.
THE IMPORTANT 2026 LIMITS
Tax-free and contribution-free are different
€676 a month
free of income tax
Up to €8,112 a year—8% of the €101,400 pension contribution ceiling—can be income-tax-free in a qualifying direct insurance, Pensionskasse or Pensionsfonds arrangement.
€338 a month
free of social contributions
Up to €4,056 a year—4% of the same ceiling—can be free of social-insurance contributions. Amounts above this can remain tax-free up to the tax limit, while attracting social contributions.
These limits generally cover employer and employee payments together. Existing or older arrangements can affect the calculation. Direct employer promises and Unterstützungskassen follow different tax rules; the figures above are for the usual §3 no. 63 insured routes.
Saving social contributions today can also reduce statutory pension accrual and certain salary-linked benefits. Compare the employer contribution and future pension with the complete effect on your finances.
Contribution rules: Deutsche Rentenversicherung.
WHEN THE PENSION IS PAID
Remember tax and health contributions
Tax relief now.
Taxation later.
For benefits funded by tax-free contributions, retirement payouts are generally fully taxable at your personal income-tax rate. This is nachgelagerte Besteuerung. Previously taxed contributions can be treated differently.
The scheme determines whether you receive a pension, capital or a combination. A lump sum can concentrate taxable income in one year. Check the start age, guaranteed benefits, pension factor and survivor cover.
Include your
health insurance
Statutory health and nursing-care contributions can also apply. For qualifying compulsory-insured recipients, the 2026 health-insurance allowance is €197.75 a month; contributions apply above it.
Nursing care has a separate threshold: if exceeded, contributions generally apply to the full relevant amount. Voluntarily insured people have different rules. Ask your health provider to calculate the effect, including any capital payout.
Health contribution allowance: TK.
IF YOUR WORKING LIFE CHANGES
Changing jobs does not mean starting again
Keep the rights
you have earned
Salary-conversion rights, including the associated statutory employer subsidy, are normally vested immediately. Pure employer-funded promises generally vest after three years once you are at least 21, with exceptions and older rules.
Check transfer
or continuation
A new employer may take over the arrangement or receive a transfer value. A statutory transfer right exists within one year for certain insured schemes if its conditions are met. Leaving Germany is not an automatic right to cash out.
Before joining or transferring, compare total charges, investment risks, employer support and the expected net pension. Unconfuse can connect you with a specialist; your employer’s scheme and payroll team remain central to the process.
Vesting and transfers: §1b BetrAVG and §4 BetrAVG.
FIND YOUR NEXT STEP
Let’s understand
your workplace pension.
We listen first, then connect you with a specialist who can compare the options around your circumstances. The product should fit you.
General information, checked 3 October 2026. Individual tax treatment and contract terms matter. Tax and social-insurance ceilings are annual limits; monthly figures are equivalents.