Number format: this calculator uses German notation throughout — a comma is the decimal separator and a dot groups thousands. “1.234,56” means one thousand two hundred thirty-four euros and fifty-six cents. The figures come from German tax law, so they are shown the way German authorities write them.
Salary sacrifice / company pension
If you convert gross pay into a company pension, your net pay falls by less than the contribution — wage tax and social security contributions fall with it. This calculator shows what it really costs you, the employer top-up required by law, and what ends up in the contract. It works out the net effect exactly, using the net-pay module verified against the ministry's calculator — up to the social-security-free ceiling of 4 % of the contribution assessment threshold (338 € per month), which is also your statutory entitlement under § 1a (1) BetrAVG.
Your salary sacrifice
287,50 €
goes into your pension every month — for 135,29 € less net pay. One euro of your own outlay becomes 2,13 € of savings contribution.
| The amount you convert | 250,00 € | from gross pay |
|---|---|---|
| − tax and social security saved | −114,71 € | less wage tax and social security |
| = your own outlay | 135,29 € | that much less net pay per month |
| + employer top-up (15 %) | +37,50 € | § 1a Abs. 1a BetrAVG |
| = savings contribution in the contract | 287,50 € | Conversion + top-up |
Free of income tax up to 676,00 € per month (8 % of the ceiling, § 3 no. 63 EStG), free of social security up to 338,00 € (4 %, § 1 SvEV) — conversion and employer top-up together; the conversion alone therefore up to 293,91 €. The employer saves 52,87 € of social security per month.
| Your own outlay in total | 48.704,40 € |
|---|---|
| Total savings contribution paid in | 103.500,00 € |
- Benefits from a company pension are taxed when they are paid out (§ 22 no. 5 EStG); for people in the statutory health scheme they also attract health and long-term care contributions (§ 229 (1) sentence 1 no. 5 SGB V). Today's tax and contribution saving is therefore partly a shift into the retirement phase.
Terms used on this page
Each term has its own page with a plain-language explanation, the technical detail and a worked example.
- Salary sacrifice (Entgeltumwandlung) — Part of your gross salary goes into a company pension, with tax and social-security relief.
- Tax class (Steuerklasse) — Assigns the wage tax deduction to your family situation and determines which allowances are already taken into account each month. Full article →
How the figures are calculated
Gross pay becomes provision — the state pays part of it
The amount converted reduces the gross figure on which tax and contributions are due. So a 300 € savings contribution does not cost 300 € of net pay but appreciably less. How much less depends on your tax class and tax rate.
The employer top-up is compulsory
Under § 1a (1a) BetrAVG the employer must add 15 % of the converted amount, to the extent that it saves social security contributions. That lifts the savings contribution above the amount converted.
The limits: 8 % free of tax, 4 % free of contributions
§ 3 no. 63 EStG exempts up to 8 % of the pension contribution ceiling from tax, while § 1 SvEV exempts only up to 4 % from contributions — conversion and employer top-up together (“4 percent in total”). With a 15 % top-up your own conversion therefore stays fully contribution-free only up to 4 % : 1,15. Between 4 % and 8 % the contribution is free of tax but liable to social security — and there the leverage drops sharply.
Example: 4.000 € gross, 250 € converted per month, tax class 1
| Amount converted | 250,00 € |
|---|---|
| − Tax and social security saved | 114,71 € |
| = Your own outlay | 135,29 € |
| + Employer top-up (15 %) | 37,50 € |
| = Savings contribution in the contract | 287,50 € |
1 € of your own outlay becomes 2,13 € in the contract. Over 30 years: 48.704,40 € of your own outlay against 103.500,00 € paid into the contract.
What this calculator does not cover
Pretending to be complete is the costliest mistake a financial calculator can make. These points are deliberately absent — either because they need details this page does not ask for, or because they cannot be substantiated in general terms:
- The return on the contract. What comes out in the end depends on the return, the costs and the annuity factor of the specific product — not substantiable and therefore not calculated.
- Taxation of the company pension. In retirement it is fully taxable and liable to contributions in the pensioners' health insurance scheme.
- The reduction in your state pension, because fewer contributions flow into the pension scheme.
Related calculators
- Gross to net — the basis: how much tax and social security the converted amount saves
- Compound interest calculator — what the savings contribution would become at an assumed return