German Pension System Explained: How It Works for Expats

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If you work for an employer in Germany, you are already building a German pension. Every payslip sends 18.6% of your gross pay, up to a yearly ceiling, to the statutory pension insurance, half from you and half from your employer. Two tools help right away: the income tax calculator shows the pension contribution on your own salary, and the private pension guide compares the ways to save for the gap.

The three pillars in plain words

Germans talk about three pillars, and expats meet all three in their first year.

• Statutory pension (gesetzliche Rente). Run by the Deutsche Rentenversicherung. Compulsory for employees, paid as a monthly pension for life, plus disability and survivors’ cover. How the statutory pension works.
• Occupational pension (Betriebsrente). Organized through your employer, often by converting part of your gross salary. Occupational and private pensions.
• Private saving. The tax-favored Rürup pension, the new subsidized Altersvorsorgedepot from 2027, or a plain ETF portfolio. The ETF savings plan guide and the broker comparison cover the practical side.

Who pays in, and who does not

Employees and trainees are in automatically, whatever their nationality, unless a foreign employer has posted them here for a limited time. Minijobbers are in too, but can opt out of their own share. Self-employed people are covered only in certain professions, among them teachers, midwives, many craftsmen and artists insured through the Künstlersozialkasse. Everyone else can join on application or pay in voluntarily. Civil servants have their own system, and doctors, lawyers or architects usually belong to a professional pension fund instead. The details are on who must pay and pensions for the self-employed. You are in good company: more than one in five people actively insured in the system are foreign nationals.

What you get back

Your pension is counted in points. A year at the average German salary earns one point, and since 1 July 2026 one point pays €42.52 a month in retirement. Someone with 45 years at average pay reaches the standard pension of €1,913.40 a month before tax and health insurance. Most expats will have far fewer points, which is why the statutory pension alone rarely covers retirement for anyone who arrives in mid-career.

Two numbers decide whether you get anything at all. You need at least five years of insurance, and years in other EU countries or agreement countries count toward them. The regular retirement age is 67 for everyone born in 1964 or later. Earlier pensions and their deductions are on retirement age in Germany, and how the pension is taxed, in Germany or abroad, is on pension taxes. From age 27 the Deutsche Rentenversicherung sends you a yearly statement with your projected pension.

If you leave Germany

Your points do not expire when you move. Germany pays its pensions to about 1.5 million people living abroad, and the money follows you to almost any country. A refund of your own contributions is possible only for some nationalities and some destination countries, and it wipes out every claim. EU rules and social security agreements let you add your years in Germany to your years in another EU country or an agreement country, so short stays can still add up to a pension.

• Leaving Germany: refund or pension? Who can get contributions back, after how long, and how to apply.
• Social security agreements: the countries that count your German years, and the certificate for posted workers.

How Germany compares

The German system pays a pension tied to what you earned, financed by today’s workers rather than by a personal pot. The insurance goes back to 1889, the pay-as-you-go financing to the reform of 1957, and the history of the German pension explains why. The comparison pages put it next to the systems many expats know from home: Germany vs. the UK, Germany vs. the US and Germany vs. other European countries.

Bottom line

Start with your own numbers: check what your salary pays in, then decide how much private saving you need on top. Leaving soon? Read the refund page before you file anything, because a refund cannot be undone.

Other parts of life in Germany: working in Germany · taxes · health insurance · moving to Germany.