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 (Entgeltumwandlung)
Part of your gross salary goes into a company pension, with tax and social-security relief.
In plain language
You give up part of your gross salary and your employer pays that part into a company pension. Because the money comes off the gross figure, tax and social security contributions fall — so your net pay drops by considerably less than you pay in. On top of that, your employer must add 15 %. The catch: in retirement the payments are taxed, and for people in the statutory health scheme contributions are due on them as well.
In detail
Under § 3 no. 63 sentence 1 EStG, contributions up to 8 % of the contribution assessment ceiling of the general pension scheme are free of income tax (2026: 8.112 € per year). They are free of social security contributions under § 1 (1) sentence 1 no. 9 SvEV only up to 4 % (2026: 4.056 € per year). § 1a (1) BetrAVG gives a legal entitlement to conversion up to 4 % of that ceiling, and § 1a (1a) BetrAVG obliges the employer to add 15 % to the extent that it saves social security contributions. The benefits are taxed later under § 22 no. 5 EStG and attract contributions under § 229 (1) sentence 1 no. 5 SGB V.
Worked example
4.000 € gross per month, 250 € converted (tax class I, North Rhine-Westphalia): net pay falls by only 135,29 €, because 114,71 € is saved in tax and social security. The employer adds 15 % = 37,50 €. So 287,50 € reaches the contract — one euro of your own outlay becomes 2,13 € of pension saving.
In brief
Tax-free up to 8 % and contribution-free up to 4 % of the pension contribution ceiling; the employer adds 15 %.
Legal basis: § 3 Nr. 63 EStG, § 1a BetrAVG · as at 2026