Changes in HR at the Turn of the Year: What's New in 2027?
From January 2027 onwards, HR will need to consider several changes in employee administration and payroll. Here is a list of the key planned changes:
Minimum Wage
From January 1, 2027, the minimum wage will increase from €13.90 to €14.60 per hour. This minimum wage does not apply to apprentices, but the minimum annual compensation for apprentices will also increase. The 2027 rate has not yet been determined, but in 2026 it is a minimum of €724 per month during the first year of the apprenticeship.
Child Benefit/Child Supplement
According to the federal government’s current plans, the income-independent child benefit is set to increase from €259 to €267 per child per month as of January 1, 2027. This corresponds to an increase of €8 per month or €96 per year, per child. The adjustment will take place automatically, so parents do not need to take any action.
The current monthly cap is set at €297 per child. However, legislative changes are planned for 2027, and according to the current draft bill, the maximum amount could be reduced to €272 per child. The final legal situation remains to be seen.
New Non-Cash Benefit Values
The 17th amendment to the Social Security Wage Regulation is currently in progress. Once complete, non-cash benefit values will change with effect from January 1, 2027. The value of free meals will increase to €355 per month, while the value of free housing will increase to €289 per month. The non-cash benefit values are planned as follows:
| Non-cash benefit values | ||
|---|---|---|
| Per calendar day | Per month | |
| Breakfast | €2.43 | €73.00 |
| Lunch or dinner | €4.70 | €141.00 |
| Housing and rent | €9.63 | €289.00 |
With the official non-cash benefit value for lunch or dinner increasing to €4.70, the maximum possible meal allowance per workday will also increase from €7.67 to €7.80 (the non-cash benefit value plus a tax-free employer contribution of €3.10 — any change to this contribution is not yet factored in).
The Deutschland-Ticket can continue to be provided as a tax- and social security-advantaged job ticket in 2027. The ticket price will increase to €66.80 per month. When employers contribute at least 25% of the ticket’s cost, the discounted job ticket price will be €63.46.
Minimum Income Threshold, Contribution Assessment Threshold, Annual Earnings Threshold and Additional Health Insurance Contribution
From January 1, 2027, the minimum income threshold to qualify as a ‘mini-job’ will be €633 per month. ‘Mini-jobs’ are subject to flat-rate taxation and are exempt from social security contributions. An increase in the flat-rate tax from 2% to 5% is planned for mini-jobs. This increase would make mini-jobs slightly more expensive.
For employment subject to social insurance contributions, the contribution assessment ceiling for health and long-term care insurance will increase to €6,375 per month/ €76,500 per year.
The contribution assessment ceiling for pension and unemployment insurance will increase to €8,850 per month (€106,200 per year). The specific euro amounts for the annual earnings (JAE) limits for 2027 have not yet been determined. These limits, along with the other social insurance calculation parameters, will be determined by the federal government as part of the 2027 Social Insurance Calculation Parameters Regulation.
According to the draft regulation, the limit is set to be €84,150 gross per year (or €7,012.50 per month). Compared to 2026 (€77,400 per year/ €6,450 per month), this represents a significant increase. In addition to the regular adjustment based on wage trends, this increase is due to an additional one-time increase of €3,600 per year (€300 per month). In practice, this means that, from 2027 onwards, three different JAE limits will need to be considered. Which JAE limit applies in a specific case depends on whether employees were exempt from statutory health insurance and covered by private health insurance at the end of 2026 because they had exceeded the applicable limit at that time.
The general statutory health insurance contribution rate will remain at 14.6%, though additional costs will arise from 2027 onwards, including increased copayments for medications and therapies (by around 50%), and reduced fixed subsidies for certain benefits in some cases (e.g., dental prosthetics). High-income earners will also pay more in absolute terms due to the aforementioned increase in the assessment threshold.
While the general long-term care insurance contribution rate remains stable at 3.6%, the Federal Ministry of Health states that the childless surcharge will rise from 0.6% to 0.9% on January 1, 2027.
The average supplementary contribution rate for statutory health insurance (GKV) is expected to be set at 2.9% for 2027, as in the previous year; however, experts and draft proposals are discussing higher, realistic adjustments ranging from 3.3% to 3.7%, depending on financial needs. However, the official rate is traditionally set by the Federal Ministry of Health (BMG) in November.
Sunday and Holiday Premiums
For Sunday and holiday premiums, the tax-exempt base wage limit is to be raised from €50 to €75 per hour. In addition, it is planned to exempt Sunday and holiday premiums regulated by collective bargaining agreements from social security contributions up to this limit. No comparable expansions are currently planned for night shift premiums.
Wage Garnishment and Transfer Order Against an Employee—What Now?
If an employer receives a garnishment and transfer order (PfÜB) against an employee, they are obligated to comply with the statutory garnishment provisions as a third-party debtor. In addition to current wages, it is particularly important to determine whether and to what extent claims arising from an existing company pension plan (bAV) are or may be affected.
After reviewing the specified claims and the scope of the garnishment, the garnishable income must be determined in accordance with §§ 850 ff. ZPO. When doing so, the garnishment exemption limits, maintenance obligations and, where applicable, special garnishment protection provisions must be taken into account. Finally, the garnishable amount must be paid to the creditor in accordance with the order.
With regard to potential garnishable claims arising from the occupational pension plan (bAV), it is necessary to distinguish between pension entitlements that are not yet due, current contributions and pension benefits that have already been paid out.
- Existing entitlements to a future occupational pension are not automatically subject to garnishment. The decisive factors are the method of implementation, the legal structure and the transferability or realizability of the entitlement.
- In the case of deferred compensation, a separate assessment must be made as to how this should be taken into account when determining the garnishable earned income. Contributions should not be automatically suspended or modified solely on the basis of the garnishment order.
- If pension benefits are already being paid out, they may generally be subject to garnishment protection for earned income. The garnishability of these benefits must be assessed based on their specific form and the applicable statutory protections.
- If an external pension provider is involved, it must be clarified who the garnished claim is directed against and whether the order also covers claims against this pension provider.
Competent legal and professional advice for the employer is essential in this context.
Planned Reform of Pension Rights Equalization
The federal government is planning to reform the equalization of pension rights. The draft bill, which was approved by the Federal Cabinet, aims to make the division of pension rights in the event of divorce fairer. The draft bill essentially proposes the following changes to the current system of pension rights equalization:
1. Retroactive equalization of omitted pension entitlements
Until now, forgotten or concealed pension entitlements could generally not be considered after a final and binding decision had been made. In future, however, retroactive equalization under the law of obligations will be possible for such entitlements. This means that, subject to the statutory requirements, the former spouse entitled to equalization will have a claim to monthly payments from the former spouse obligated to provide equalization.
For pension providers, this generally does not create an additional obligation to pay benefits. However, they may be required to provide additional information regarding entitlements that were not previously taken into account.
2. Inclusion of Capital Commitments for Business Owners in Pension Rights Equalization
Until now, occupational pension entitlements aimed at a lump-sum payment have generally not been included in pension rights equalization for business owners, but rather in the equalization of accrued gains. In future, however, these entitlements will also be included in pension rights equalization. This will particularly affect controlling shareholders who are also managing directors. The aim is to ensure they are treated equally to employees with corresponding occupational pension entitlements.
For pension providers, this means that such entitlements must be disclosed and divided as part of pension rights equalization, if necessary.
3. Simplifications for Minor Entitlements
The new regulations aim to improve the conditions under which minor entitlements are exempt from equalization. This is intended to avoid the creation of very small or fractional entitlements.
For pension providers, this means a reduction in administrative burden, as minor entitlements will not need to be divided and managed in the long term in as many cases.
World Mental Health Day: The Importance of Early Intervention
World Mental Health Day, observed annually on October 10, was created to raise awareness about mental health issues and to destigmatize mental illness. Mental health issues have a profound impact on the workplace in Germany, acting as one of the primary drivers of long-term employee absenteeism and economic strain. Accounting for up to 18.7% of total absences, absences due to mental health can last an average of 33 to 34 days off per episode*, costing businesses billions annually.
To lower absenteeism, employers can make a meaningful difference by shifting toward proactive prevention. Creating an open company culture that encourages transparent communication allows leaders to identify and resolve workplace stressors, such as unmanageable workloads, before they lead to chronic stress.
An Employee Assistance Program (EAP) offers effective support in this regard. By providing confidential 24/7 access to professional counseling, EAPs are a valuable tool for early intervention. They help employees navigate personal and professional challenges before they escalate into burnout. In this way, they can effectively reduce absenteeism and foster a healthier and sustainable workplace.
*DAK Psychreport 2026
