Most employees in Germany automatically pay contributions into the statutory pension insurance system. As a rule, this happens without any action required from the employee, as the contributions are deducted from the gross salary by the employer and paid directly to the pension authority together with the employer’s contribution.
For expats who have worked in Germany only for a limited period of time, it may be possible under certain conditions to claim a refund of pension contributions already paid.
What are the Requirements?
If an employment relationship in Germany ends after less than five years, for example due to a mutual termination agreement, you may be entitled to a partial refund of their pension contributions.
In addition to a contribution period of less than five years, the following requirements must be met:
- The employee must not be a citizen of an EU Member State (this also includes Switzerland, the EEA and the UK)
- The employee’s permanent place of residence must be outside the EU, the EEA, the UK and Switzerland
- More than 24 months must have passed since the last pension contribution was paid in Germany.
Depending on the country of origin, specific bilateral rules or exceptions may apply.
Application Process and Amount of the Refund
The application for a pension contribution refund must be submitted directly to the German Pension Insurance (Deutsche Rentenversicherung – DRV). There are also service providers who offer assistance with the application process.
The DRV will refund only the employee’s share of the contributions, not the employer’s contributions. In recent years, the employee contribution rate has amounted to 9.3 % of gross salary, up to the contribution assessment ceiling (currently EUR 8,450 per month).
The total amount that can be refunded therefore depends on the level of salary and the duration of employment in Germany. In many cases, the refundable amount will be a high four-figure or even five-figure sum.
