Retirement provision: pension contributions, the Basisrente and the miners' ceiling

Jana Weiß, a self-employed architect, pays 18,000 € to her professional pension fund in 2026 and puts another 15,000 € into a Basisrente contract. She expects 33,000 € of special expenses. Her assessment shows 30,826 €, and the rest simply disappears. The tax office has made no mistake: that is the 2026 ceiling of section 10(3), derived from a pension scheme she has never belonged to.

Three baskets for provident expenses

Under section 10(1) EStG, special expenses (Sonderausgaben) are private outlays that the legislator nonetheless lets you deduct, provided they are neither business expenses nor income-related expenses. Among them, three numbers form a group of their own, which subsection 2 brings under a single name: provident expenses, or Vorsorgeaufwendungen.

Number 2 covers contributions for old-age provision, number 3 the basic contributions to health and long-term care insurance, and number 3a every other insurance premium the law considers worth supporting. Each basket has its own ceiling, and room left unused in one basket never tops up another.

This module deals with the first basket, the second module with the other two. The split is more than a matter of layout. Depending on how the contract is drafted, a disability insurance policy can land in the first or in the third basket, and the difference in deduction quickly runs into several thousand euros.

Subsection 2 sets common conditions for all three baskets. The contributions must not be directly and economically linked to tax-exempt income. And they must be paid to specific recipients: licensed insurance companies, professional pension funds, social insurance bodies, or providers within the meaning of section 80.

The first condition has an exception for cross-border workers and people working abroad. If the contributions relate to income from an EU or EEA state or from Switzerland that is exempt in Germany under a double taxation treaty, they stay deductible as long as the other state gives them no tax relief whatsoever.

What later happens to the pensions is not part of this course. How payouts from the statutory pension or from a Basisrente are taxed, and how Riester support under section 10a works, is explained in the course on pensions. Here the focus is solely on the paying-in side.

What counts as basic old-age provision

Letter a of number 2 names the contributions everyone thinks of first: contributions to the statutory pension insurance schemes and to the agricultural old-age fund. Contributions to professional pension funds are treated the same, provided those funds pay benefits comparable to those of the statutory pension insurance.

For doctors, lawyers, architects or tax advisers, the pension fund of their professional chamber therefore ranks for tax purposes alongside the German statutory pension insurance. What matters is how comparable the benefits are, not the name of the body or its legal form.

Letter a draws no line between compulsory and voluntary contributions. A self-employed person who is not compulsorily insured but pays voluntarily into the statutory pension insurance is making contributions to a statutory pension scheme in the literal sense of the provision.

Letter b opens the basket to private contracts, but only for a narrowly defined group. Double letter aa covers building up one's own funded old-age provision, known in practice as the Basisrente or, after the economist behind it, the Rürup pension. Double letter bb covers pure protection against occupational disability or reduced earning capacity.

Traditional endowment life insurance, fund savings plans and home savings contracts do not belong in this basket. Anyone saving for retirement with such products cannot deduct the premiums as retirement provision. Only legacy contracts from before 2005 still find a place in the third basket, which the second module covers.

The Basisrente and its contract conditions

A private contract only counts as a Basisrente if it provides solely for a monthly life annuity payable for the lifetime of the taxpayer. The annuity may not start before the taxpayer's 62nd birthday. As a supplement, the contract may also cover occupational disability, reduced earning capacity or surviving dependants.

Older contracts have a lower age limit. Under subsection 6, for contracts concluded before 1 January 2012, the annuity may not start before the 60th birthday. Anyone holding such a contract should therefore check, whenever it is amended, which of the two limits applies to them.

The provision accepts as surviving dependants only the spouse and the children for whom child benefit or a child allowance is due. An orphan's pension may run at most for as long as the child still counts as a child for tax purposes. Partners outside marriage or siblings cannot be covered through a Basisrente.

The strictest conditions concern access to the money. The entitlements must be impossible to inherit, transfer, pledge, sell or convert into a lump sum. The savings are thus locked into the annuity for good: no surrender, no one-off payout, no use as security for a loan.

The law leaves two small openings. Provider and customer may agree that up to twelve monthly payments are combined into one payout. And a small annuity within the meaning of section 93(3) may be commuted, in which case all Basisrente contracts held with the same provider are added together.

Pure disability cover under double letter bb follows the same pattern. The contract may provide only for a monthly life annuity for an insured event occurring before the 67th birthday. If the disability ceases for medical reasons, the annuity payments may end.

The amount of the promised annuity may depend on the age at which the insured event occurs, but only from the 55th birthday onwards. An ordinary disability policy that does not meet these conditions falls under number 3a instead, with its much lower shared ceiling.

Finally, a formal requirement without which not a single euro is deducted. Under subsection 2 sentence 2, the contract must be certified under section 5a of the Pension Contracts Certification Act. The provider reports the contributions and the certification number to the central office itself under subsection 2a; no paper receipt is foreseen.

The 2026 ceiling and where it comes from

Subsection 3 sentence 1 names no amount in euros. Retirement contributions are taken into account up to the maximum contribution to the miners' pension insurance, rounded up to a full euro. The ceiling therefore tracks the development of social insurance automatically every year, without the Income Tax Act having to be amended.

The miners' pension insurance, knappschaftliche Rentenversicherung, is a separate branch of the statutory pension, with a higher contribution ceiling and a higher contribution rate than the general branch. Its maximum contribution is therefore the largest the statutory pension knows. The law uses it as the cap for everyone, whether or not they were ever insured there.

For 2026, section 4 of the 2026 Social Insurance Calculation Values Regulation sets the contribution ceiling of the miners' pension insurance at 124,800 € a year. The notice of contribution rates for 2026 keeps this branch at 24.7 percent, against 18.6 percent in the general pension insurance.

The maximum contribution is the product of the two: 124,800 € times 24.7 percent gives 30,825.60 €. Rounded up to a full euro, the 2026 ceiling for retirement contributions is therefore 30,826 € per taxpayer. The calculation rests on the two legal sources read, not on a second-hand table.

For spouses assessed jointly, sentence 2 doubles the ceiling to 61,652 €. The wording ties the doubling solely to joint assessment and does not ask which of the two spouses made the contributions.

Until 2022 only a rising percentage of the result was deductible: 76 percent in 2013, then two percentage points more each year. Since calendar year 2023, subsection 3 sentence 6 sets the rate at a full 100 percent. For 2026 there is thus no partial deduction any more, and leaflets quoting percentages are out of date.

The employer share: added first, then taken back out

For employees, the insured person and the employer each bear half of the pension contributions under section 168(1) no. 1 of Book VI of the Social Code. The employer share is tax-free under section 3 no. 62 EStG, because the employer pays it under a legal obligation. It has therefore never been taxed as wages.

Even so, the law counts it at first. Under number 2 sentence 6, the tax-free employer share is added to the contributions, as is any tax-free employer subsidy treated like it. Only this total is then tested against the ceiling.

In the last step, subsection 3 sentence 5 removes the employer share again. What is deductible is the amount after applying the ceiling, reduced by the tax-free employer share. In the end only what the employee paid out of taxed income counts, but with an important side effect.

The side effect hits employees who also save privately. Because the employer share takes up part of the 30,826 € frame, less room is left for a Basisrente. Someone earning up to the contribution ceiling of the general pension insurance has already used a large part of the frame on compulsory contributions.

The contribution ceiling of the general pension insurance is 101,400 € in 2026. At 18.6 percent this gives a total contribution of 18,860.40 €. An employee at that ceiling is therefore left with 11,965.60 € that can still be paid into a Basisrente and claimed as special expenses.

A special rule applies to mini-jobbers who top up their own pension contributions. Contributions under section 168(1) nos. 1b or 1c or section 172(3) or (3a) of Book VI are only added on application under number 2 sentence 7, and only then do they also reduce the deductible amount under subsection 3 sentence 7.

The self-employed: the whole frame for their own provision

Self-employed people without compulsory insurance have no employer share taking up the frame. The full 30,826 € of 2026 is open to their own contributions, whether to a professional pension fund, as voluntary contributions to the statutory pension insurance, or into a Basisrente. No reduction under sentence 3 applies to them.

That explains the figure in the opening story. The architect pays 18,000 € to her pension fund and 15,000 € into a Basisrente, 33,000 € in total. 30,826 € are deductible. The remaining 2,174 € have no effect in this year or any later one, because section 10 has no carry-forward of unused amounts.

For planning purposes this implies an order of steps. A self-employed person who wants to pay into a Basisrente first deducts compulsory or pension fund contributions from the frame. Only the remainder has a tax effect. A higher contribution only pays off for other reasons, such as the lifelong annuity itself.

Civil servants, managing directors, MPs: the reduction

Anyone who acquires a pension entitlement wholly or partly without contributing should not use the full frame for private provision on top. Subsection 3 sentence 3 therefore reduces the ceiling for certain groups, namely by a notional pension contribution they never actually paid.

The first group consists of employees who are exempt from the statutory pension insurance or were exempted at their employer's request, and who are entitled on leaving to a lifelong pension or a severance payment, or who must be retroactively insured. That is the typical case of civil servants, judges and career soldiers.

The second group consists of employees who are not subject to compulsory pension insurance and have acquired pension entitlements by contract in connection with their work. A shareholder-managing director of a GmbH who is not compulsorily insured and holds a pension promise can fall into it. Without such a promise, the full ceiling remains available.

The third group earns income under section 22 no. 4, that is, parliamentary allowances, and acquires a pension entitlement wholly or partly without own contributions. The same calculation rule applies to all three groups.

The reduction equals the amount which, applied to the income from the qualifying activity, matches the total contribution to the general pension insurance, employer and employee shares combined. For 2026 that is 18.6 percent of this income. The miners' figures only set the starting amount, not the reduction.

Sentence 3 expressly applies the reduction to the doubled amount of sentence 2 as well. It is measured on the income of the spouse who belongs to one of the three groups. The other spouse's income from employment subject to compulsory pension insurance plays no part in the reduction.

The reduction therefore targets exactly those groups whose pension arises without own contributions. A civil servant saving privately in a Basisrente thus has a much smaller frame than a self-employed colleague with the same income who has to finance all of her retirement provision herself.