Social insurance

In Germany, people are covered by the so-called social insurance system. Regardless of whether you are starting up as a main or sideline business: Please inform yourself on social insurance and get proper advice. Calculate the precise costs involved and incorporate them into your business plan.

Statutory or private health and long-term care insurance (Krankenversicherung, Pflegeversicherung)

In Germany, health insurance is compulsory even for self-employed persons.

Essentially, you can choose between

  • statutory health insurance (Krankenkasse) if you have already had statutory health insurance for a sufficient period in advance
  • and private health insurance.

If you had statutory health insurance before becoming self-employed, you can keep it in future. Ask your Krankenkasse out about the possibility of taking out a sickness benefit plan (Krankengeld). This allows you to compensate for part of your loss of income during illness. Self-employed women also receive maternity benefits (Mutterschaftsgeld), provided they have statutory health insurance and are entitled to sickness benefits.

Ask your private health insurance company about the possibility of taking out a plan for sickness benefits (Krankentagegeld). As a self-employed person with private health insurance, you are not entitled to maternity benefits. Please note: After switching to private health insurance, it is difficult or impossible to return to statutory health insurance at a later date. Decisive factors include the insured person’s social security status, salary and age.

Seek professional advice and talk to your health insurance provider!

Are you planning to start a side business? Talk to your health insurance provider about mixing employment with self-employment.

Statutory health insurance “gesetzliche Krankenversicherung”

  • Premiums are linked to your income.
  • Minimum and maximum income thresholds.
  • Family insurance is possible.

The Federal Ministry of Health provides more information on financing statutory health insurance as well as information on contributions, additional premiums and upper earnings limits. A list of all health insurance providers together with their areas of coverage and supplemental contribution rates can be obtained from the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband).

Private health insurance

  • Premiums depend on individual risk factors, medical history, age, the level of coverage you choose etc.
  • Premiums are not linked to your income.
  • Family insurance is not possible. Every family member must have their own contract drawn up.

Further information on switching to private health insurance can be found on the website of the Federal Ministry of Health (Bundesgesundheitsministerium).

Long-term care insurance “Pflegeversicherung”

Long-term care insurance is the fifth pillar of Germany’s social insurance system in addition to the social insurances covering sickness, accident, unemployment and old age provision. It mainly covers the costs of care-related expenses. When taking out health insurance, you are automatically covered by long-term care insurance “Pflegeversicherung”: Statutory health insurance policyholders are insured with social care insurance. People with private health insurance must also get obligatory private care insurance with an insurance company of their choice. The Federal Ministry of Health provides more information on financing long-term care insurance as well as information on contributions, additional premiums and upper earnings limits.

Please seek professional advice

Statutory pension insurance (gesetzliche Rentenversicherung)

Statutory pension insurance is compulsory for certain occupational groups:

This includes teachers, artists, nurses, licensed craftsmen and those who only have one client, e.g. commercial agents. Teachers is a very broad term that also covers tutors, coaches, presenters and sports trainers. Artists include musicians, authors, writers and journalists.  When it comes to monthly contributions, there are three options: regular contribution [Regelbeitrag], half of the regular contribution fee in the first three years after taking up self-employment, or income-related contribution.  Visit the website of Deutsche Rentenversicherung (DRV) [German Statutory Pension Insurance Scheme], scroll down to “Ihre Beitragshöhe als pflichtversicherter Selbstständiger” to learn the current level of contribution for the compulsorily insured.

Are you planning to start a side business? Statutory pension insurance might be compulsory in some occupations even as a sideline, although you may be able to apply for an exemption. Deutsche Rentenversicherung has compiled further information and examples in this brochure (PDF, 711KB).

All other self-employed persons have the option of voluntary statutory pension insurance.

If you are not compulsorily insured in the statutory pension insurance scheme, you can make voluntary contributions to the statutory pension insurance scheme. You can either pay the full contribution or an individually agreed contribution. Deutsche Rentenversicherung provides information on the current contribution amount for voluntarily insured persons.

Pension schemes of the liberal professions for members of professional associations

Members of regulated liberal professions such as physicians, pharmacists, architects, notaries, lawyers, tax consultants, veterinaries, chartered accountants, dentists and psychological psychotherapists are required to join professional chambers [berufsständische Kammer]. Very often, this membership comes with a compulsory professional pension scheme [berufsständische Versorgung]. You can be exempted from statutory pension insurance in favor of the professional pension scheme.

Private pension insurance and retirement plan

Self-employed persons must plan for retirement and work out the costs involved right from the start. To do so, you can combine various options, such as statutory and private pension insurance as well as other forms of retirement plans.

Please seek professional advice:

  • Deutschen Rentenversicherung (DRV) [German Statutory Pension Insurance Scheme]
    Tel. 0800 1000 4800, email via contact form, a phone service for people who are deaf or hearing impaired is available
    You can arrange an appointment with the Munich based advisory office “Deutsche Rentenversicherung Bayern Süd” by calling  0800 1000 480 15.
  • The municipal service Versicherungsamt der Stadt München [Social Insurance Advisory Office] offers free advice to those living or working in Munich and have questions about statutory health, accident and pension insurance. Book an appointment online.
  • The German Consumer Organisation “Verbraucherzentrale” offers fee-based advice on pensions and retirement planning.
Statutory accident insurance (Gesetzliche Unfallversicherung)

All self-employed persons, regardless of whether they are pursuing a main or sideline business, must register with the relevant Social Accident Insurance Institution within one week of starting.

Statutory accident insurance is one of five mandatory insurances within the German social security system. It covers accidents at work or on the way to or from work, and recognized occupational illnesses. This insurance may be compulsory for the entrepreneur depending on their activity. It is always compulsory if you employ people. The German Social Accident Insurance Institutions “Berufsgenossenschaften” are organised according to sectors.

For further information you can download the leaflet “German Social Accident Insurance“, available in 11 languages.

Please seek professional advice:

If you are unsure which Social Accident Insurance Institution is responsible for you, please either contact one of the institutions directly, or dial the toll-free phone number 0800 60 50 40 4 or send an E-Mail to obtain further information. A phone service for people who are deaf or hearing impaired is available.

Voluntary statutory unemployment insurance (Freiwillige gesetzliche Arbeitslosenversicherung)

As a full-time entrepreneur you can apply for voluntary unemployment insurance at the Munich Office of the Federal Employment Agency within three months after starting your self-employment.

Under certain circumstances, individuals who decide to leave self-employment can contract voluntary unemployment insurance. The cost is around EUR 80 per month, although start-up entrepreneurs pay only half of this premium.

FAQs (in German, please use a translation tool of your choice)

Please seek professional advice:

The Federal Employment Agency [Bundesagentur für Arbeit] provides information in a leaflet (PDF, 257 KB). You can reach the Bundesagentur für Arbeit by phone at 0800 4 5555 00, a phone service for people who are deaf or hearing impaired is available.

Artists’ Social Insurance (Künstlersozialkasse KSK)

The Artists’ Social Insurance (Künstlersozialkasse KSK) covers self-employed people that exercise an artistic or journalistic profession. It is compulsory with a focus on pension and health insurance. Applicants need to complete a questionnaire and enclose evidence of their activities. KSK will then check if the prerequisites for the artists’ social security insurance scheme are fulfilled. If artists or writers qualify to join KSK, they need to pay only approximately half of the cost of their contributions. This puts them in the same favourable position as employees, as the second part of the contribution is financed via a levy paid by companies which utilise artistic and journalistic/written works  such as galleries, music schools, theatres, radio stations, advertising agencies or publishing houses and via a Federal Government grant.

KSK provides further information:

Please seek professional advice:

  • Contact KSK by phone at +49 4421 9289000 or by email
  • Attend a free online seminar by KSK to learn more about artists’ social insurance and how to file an application.
  • The non-profit organization Paul-Klinger-Künstlersozialwerk e.V. offers help with completing the KSK questionnaire and selecting evidence of activities. Contact them by phone at +49 89 57 00 48 95 or by email.
  • The municipal Team of Excellence for the Cultural and Creative Industries is the first point of contact for all creative and cultural practitioners in Munich. Their services include advice on business models and financing strategies, free training,  networking, internationalization and finding workspace. Contact them by phone at +49 89 233 28917, by email  or use their online contact form.
Special feature: A1 certification for cross-border activity

If you work temporarily in an EU country, in Iceland, Liechtenstein, Norway or Switzerland, you will always have to carry an A1 certification with you. It is proof of your existing social security protection in Germany. It is valid regardless of the length of your business travel. Other certifications may be required for other countries.

Please seek professional advice: