Germany's 2026 Regulatory Overhaul Hits Minijobs, Tax Law, and Health Insurance — Employers Face Rising Costs
18.06.2026 - 02:31:58 | boerse-global.de
The financial strain on Germany’s statutory health insurance system is forcing the hand of policymakers. In the first quarter of 2026, expenses jumped 8 percent year-on-year, driven by a 9.4 percent surge in hospital costs and a 6.4 percent increase in pharmaceutical spending. Experts now project a funding shortfall of roughly €18.8 billion for 2027. Health Minister Warken aims to hold the average supplemental contribution rate steady at 2.9 percent, which would require deep cuts by the country’s sickness funds. But business groups are pushing back against additional burdens, including a proposed new long-term care insurance levy of 3.6 percent for Minijob holders and a potential hike in the employer contribution to Minijob health insurance from 13 percent to 17.5 percent.
Amid that fiscal pressure, a major change for low-wage workers takes effect on July 1, 2026. Minijobbers — employees earning up to €603 a month, up from €556 at the start of the year — will get a one-time opportunity to reverse their exemption from mandatory pension insurance. Those who opt in must submit the revocation in writing or electronically to their employer, and it applies from the following month; retroactive cancellation is not allowed. For commercial Minijobs, the employee then pays 3.6 percent of earnings as a personal contribution, while the employer continues to pay the flat 15 percent. In private households, the employee share rises to 13.6 percent. The move unlocks access to Riester subsidies, occupational pension plans, and creditable compulsory contribution periods. Workers holding multiple Minijobs can only revoke the exemption for all of them together, and a second exemption later is permanently barred.
Another set of changes is brewing in the tax code. On May 31 the Finance Ministry published a draft of the 2026 Annual Tax Act. Starting in 2027, tax-free supplements for Sunday, holiday, and night work will be calculated only on the base wage, excluding other tax-free payments — a response to a Federal Fiscal Court ruling. The period for designating a "first regular place of work" shrinks from 48 months to 24. Tax authorities will also gain expanded digital access to electronic accounting systems. From 2028, corrections to wage tax certificates must be submitted by the end of February of the following year. The legislative process is expected to wrap up by the end of 2026.
A separate adjustment targets partial retirement: anyone drawing more than two-thirds of a full pension will no longer qualify for sickness benefit.
Over the border, Austria is also rolling out new rules. Since January, employers there must report the agreed weekly working hours when registering workers for social insurance. The entry age for the corridor pension (a form of early retirement) rises to 63, requiring 42 insurance years. In June, the EU Pay Transparency Directive takes effect. On June 10 the Austrian government presented a draft budget accompanying law for 2027–2028, which includes a corporate income tax rate of 24 percent on profit shares exceeding €1 million, changes to the real estate gains tax, and — from 2027 — a taxable benefit for private use of electric company cars.
Digitalization is also pressing ahead. Since January 1, 2026, invoices and import documents for input VAT refund claims must be uploaded via the Federal Central Tax Office portal. The Finance Ministry clarified the rules in a letter dated June 2. The threshold for small invoices not requiring proof of payment remains €250. All rules apply to claims filed after the turn of the year.
