Have you noticed that a big part of your salary disappears into taxes and social security? What if you could use that "gross money" to build a pension, and your employer pays a part of it too? In my Remote consultation, I show you how to use the company pension (bAV) as a powerful tool for your savings.
Key Facts at a Glance
| What it provides | A company pension via deferred compensation under § 3 Nr. 63 EStG: contributions from gross salary (in 2026 up to €338 monthly social security-free and up to €676 monthly tax-free) plus an employer subsidy of at least 15%. |
|---|---|
| Limits and drawbacks | Full health and long-term care contributions on the company pension above the statutory health insurance allowance under § 226 Abs. 2 SGB V (€197.75 monthly in 2026), a lower statutory pension, and limited flexibility when changing employer. Details |
| Who needs it | For employees whose employer pays a good subsidy, especially with a medium to higher income. |
| What does it cost | It depends on your personal situation. I will gladly prepare a non-binding quote for you: get in touch. |
| What to look out for | The level of the employer subsidy, the costs and investment of the contract, portability when changing jobs and deductions in old age. |
Daniel's Story: Why saving from gross salary is a smart move
Fictional example for illustration; all persons and events are invented.
Daniel moved to Germany a few years ago to work as an engineer. He enjoys his job and the security it provides. But he realized that the state pension in Germany will not be enough to keep his current lifestyle when he gets older.
During lunch, his colleagues talked about a "direct insurance" (Direktversicherung) where the boss adds money. Daniel was skeptical: "Is it just another boring insurance with no profit?"
We looked at his situation together. Daniel learned that the company pension is a "turbo" for his savings. If he puts €100 from his gross salary into the pension, his net take-home pay only goes down by about €50. The other €50 comes from tax and social security savings. Plus, his employer adds at least 15% on top. Daniel says: "It's like getting a 50% discount on my retirement savings!"
More Net for your Future: How it works for Expats in Germany
The idea is simple: You use a part of your salary before taxes to save for retirement. Here is why it is so good:
- Tax Free: Under § 3 Nr. 63 EStG, you pay no income tax on contributions up to €676 per month (8% of the pension contribution ceiling in 2026).
- Social Security Savings: Up to €338 per month (4% of the pension contribution ceiling in 2026) is also free of social security contributions.
- State Subsidies from Boss: By law, most employers must add a 15% subsidy to your savings.
- ETF Growth: We use modern plans that invest in ETFs for better returns.
ETF Power instead of zero interest
Forget the old pension plans of the past. Today, we use ETFs (Exchange Traded Funds). They are cheap, spread your risk across the world, and have the best long-term results.
You combine the massive tax savings of the bAV with the growth of the global stock market. Your plan is flexible, you can take it with you if you change your job or move.
bAV Advantage Calculator: More Net for Your Pension
See how much you save through taxes and the employer subsidy. You will see that a high contribution costs you much less than you think!
You effectively invest only €60, but €115 arrive in your contract every month.
How the calculation works:
1. Gross is not Net: The contribution is taken directly from your gross salary before taxes and social security are deducted. This means you save a large part of the costs because you pay less tax.
2. Gift from your Boss: By law, your employer must contribute at least 15% on top of your own contribution. This is "free money" that increases your savings immediately.
3. Social Security Savings: Since your gross salary subject to tax and social security is reduced, you also pay less income tax and (below the contribution ceilings) less for health and pension insurance today. This further reduces your actual net cost.
4. The Turbo Effect: The combination of tax savings and employer subsidy ensures that much more money ends up in your contract than you actually "feel" in your wallet.
Requirements for Expats
- Valid German Address (Anmeldung)
- German Bank Account (IBAN)
- German Tax ID
Limits and Drawbacks
A company pension often pays off, but not always. You should factor in these drawbacks:
- Deductions in old age: In retirement, income tax is due on the company pension, and for members of statutory health insurance, health and long-term care contributions apply above the allowance under § 226 Abs. 2 SGB V (€197.75 per month in 2026).
- Lower statutory pension: Deferred compensation means you pay less into the statutory pension.
- Changing jobs: The new employer does not have to take over the contract; it often continues without contributions.
- Costs: Contracts selected by the employer are not always cost-effective.