The company pension (betriebliche Altersvorsorge, bAV) is the second pillar of Germany's pension system. Since 2002, every employee has a legal right to salary conversion (§ 1a BetrAVG).
Tax and social security benefits 2026
- Tax-free contributions: up to 7,248 €/year (§ 3 No. 63 EStG – 8% of contribution ceiling)
- Social security-free contributions: up to 3,624 €/year (4% of ceiling)
- Mandatory employer contribution: at least 15% on salary conversions
Example: net cost of salary conversion
For a 200 €/month conversion (tax class I, 3,500 € gross), the actual net cost is only approx. 112 € – plus 30 € mandatory employer contribution (15%).
Sources: BetrAVG, § 3 No. 63 EStG, BMAS.