Ist die bKV steuerfrei?

Up to the monthly non-cash benefit exemption limit of 50 euros per employee, the supplementary health insurance is exempt from income tax and social security contributions (Section 8(2), Sentence 11 of the German Income Tax Act). For higher premiums, the employer may claim a flat-rate tax deduction of 30 percent (Section 37b of the German Income Tax Act)—the benefit remains net-neutral for the employee nonetheless.

Is the supplementary health insurance tax-free?

The tax treatment of supplementary health insurance is one of its most powerful economic tools. It follows two clearly defined paths, depending on the premium amount.

Option 1: Exemption limit for non-cash benefits under Section 8(2), sentence 11 of the Income Tax Act (EStG)

Bonuses of up to 50 euros per month per employee remain completely exempt from taxes and social security contributions. Prerequisite: The bonus must be a genuine non-cash benefit (the employee cannot have the bonus paid out in cash), and the employer must be the policyholder. Both conditions are automatically met in standard supplementary health insurance plans.

Important: This is a threshold, not a tax-free allowance. If the €50 threshold is exceeded by even a single cent, the entire non-cash benefit is taxable—not just the amount exceeding the threshold. In addition, all non-cash benefits received in a given month are added together, including benefit cards, gas vouchers, and meal vouchers.

Option 2: Flat-rate taxation under Section 37b of the Income Tax Act

For plans with a monthly premium of more than 50 euros, the employer can pay the premium as a lump sum subject to a 30 percent tax rate, plus the solidarity surcharge and church tax. The employee then receives the benefit on a net-neutral basis—no income tax, no social security contributions. The employer bears the tax burden in addition to the premium.

Calculation example: A €60 monthly plan costs the employer approximately €950 per year under the flat-rate tax system (€720 in premiums plus €230 in flat-rate tax). By comparison, a pay raise with the same net effect would cost the employer about €1,500.

Social Security

Flat-rate-taxed supplementary health insurance premiums are exempt from social security contributions in most cases (Section 1(1)(14) of the Social Security Exemption Regulation). This eliminates the full social security contribution obligation of approximately 40 percent that would otherwise apply to a regular salary payment—an additional efficiency gain.

For employees filing their tax returns

bKV premiums do not appear on the employee’s income tax statement or tax return. The reimbursements the employee receives from the bKV are also tax-free—they are not considered income or special expenses.

Related terms

How much does supplemental health insurance cost per employee?

Supplementary health insurance plans typically cost between 10 and 50 euros per month per employee. Plans costing less than 50 euros are tax-free (non-cash benefit limit); higher-cost plans are subject to a flat-rate tax of 30 percent. Premium plans with additional coverage options cost between 60 and 100 euros per month.

See the full answer

What is a company health insurance plan (bKV)?

Employer-sponsored health insurance (bKV) is a supplementary insurance plan funded by the employer for employees covered by statutory health insurance. It covers services that statutory health insurance (GKV) does not reimburse, or only reimburses to a limited extent—such as dental prosthetics, eyeglasses, alternative practitioners, or advanced preventive care. Up to 50 euros per month, it is exempt from taxes and social security contributions.