Is supplementary health insurance (bKV) tax-deductible as a business expense?

The deduction for operating expenses is the least controversial part of the bKV system—and the one most frequently omitted from profitability analyses.

What Should Be Taken Into Account

• Insurance Premiums
• Any service fee for managing the contract
• Tax paid by the employer for the flat-rate options
• In the case of net wage taxation, the employer's share of social security contributions is also included

Regardless of the exemption limit

A common misconception is the assumption that deductions are limited for amounts above 50 euros. That is not the case. The tax-free limit determines how the benefit is treated for the employee—not whether the company can deduct the costs. Even a supplementary health insurance plan with a monthly premium of 80 euros remains fully deductible as a business expense.

Why this affects the choice of model

Deductibility puts the cost differences between the four tax models into perspective, but it does not eliminate them. Anyone comparing the options should consistently analyze them at the same level—either entirely before or entirely after tax effects. Mixing the two approaches regularly leads to incorrect rankings.

Even when compared to a pay raise

Expenses are also deductible there, including non-wage labor costs. Claiming the deduction on only one side distorts the result—in either direction, depending on which side is given preferential treatment.

Practical Implementation

The specific journal entries and their allocation to the appropriate accounts vary depending on the chosen tax model and must be coordinated with the accounting department.